Punjab-Haryana High Court
M/S Pom Hydro Energy Ltd And Anr vs State Of Haryana And Others on 19 April, 2022
Author: Raj Mohan Singh
Bench: Raj Mohan Singh
CWP No.12870 of 2021 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP No.12870 of 2021 (O&M)
Date of Decision: 19.04.2022
M/s POM Hydro Energy Ltd and another
......Petitioners
Vs
State of Haryana and others
.....Respondents
CORAM: HON'BLE MR. JUSTICE RAJ MOHAN SINGH
Present:Mr. Akshay Bhan, Senior Advocate with
Mr. Himanshu Arora, Advocate and
Mr. Sushant Kareer, Advocate
for the petitioners.
Mr. Baldev Raj Mahajan, Advocate General, Haryana
with Mr. Vivek Chauhan, Addl. A.G., Haryana.
Mr. Kuldeep Tiwari, Advocate
for respondent No.3.
****
RAJ MOHAN SINGH, J.
[1]. Petitioners have preferred this writ petition for the issuance of an appropriate writ in the nature of certiorari quashing the order dated 01.07.2021 passed by respondent No.1 being arbitrary, unreasonable and non-speaking. Further writ in the nature of mandamus is also sought directing the respondents to arrange continuous discharge of flow of water to the small hydro-power project of the petitioners so that the project of the petitioner may not suffer losses. Petitioners have 1 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 2 also prayed that in case discharge of water cannot be arranged, then adequate compensation be paid to them equivalent to the revenue loss that may be accrued for the period during which the canal remains closed for the purpose of remodelling and execution works.
[2]. Petitioner No.1 is wholly owned subsidiary of petitioner No.2 and is engaged in small hydro energy power projects in the State of Haryana and Himachal Pradesh for generation of electricity. Petitioners have two small hydro power projects commissioned at Khukhni and Mussapur (1.4 MW each). Project at Khukhni is on the augmentation canal falling within District Yamunanagar and Mussapur is on the augmentation canal falling within District Karnal. Government of Haryana came up with a policy dated 23.11.2005 with an object to create conditions conducive for involvement of Public Private partnership in the renewable energy sources based power projects in the State of Haryana. In pursuance thereof, the applications were invited from independent power producers. Petitioners were successful through the process of bidding. Letter of intent was issued on 31.10.2006 and MOU was signed on 27.11.2006.
[3]. According to policy/notification dated 23.11.2005, the State of Haryana aimed to achieve a minimum of 10% (i.e. 500 2 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 3 MW) of the total capacity addition of 5000 MW of conventional power to be generated through Renewable Energy Power Projects by 2012 as per Ministry of Non-Conventional Energy Sources, Govt. of India's policy. The Nodal Agency was Haryana Renewable Energy Development Agency (HAREDA) for co-ordinating all activities relating to Renewable Energy Development including generation of power using non- conventional energy sources. HAREDA is responsible for laying down the procedure for inviting the proposals from Independent Power Producers (IPPs), DPR preparation, evaluation of project proposals, project approvals and project progress monitoring etc. HAREDA shall function as single window clearing Agency for all Renewable Energy Power Projects. The tenure of Power Purchase Agreement (PPA) to be signed between Independent Power Producers (IPPs) and concerned power licensee shall be valid for a minimum period of 20 years or more depending upon life of the plant. After expiry of the period there shall be negotiations between the power producer and concerned power licensee. Proposal has to be approved by the Board of Governors of HAREDA i.e. High Powered Committee, who will enter into MOU with private investors for preparation of DPR and implementation of the Project within a specified period. After approval of the DPR by the HAREDA, the private investor is required to enter into Power Purchase Agreement (PPA) with 3 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 4 the concerned power licensee for the sale of power to it or to the third party after getting necessary approval from the Haryana Electricity Regulatory Commission (HERC). [4]. According to the MOU signed/made on 27.11.2006, the Government shall allow pondage to be created in the upstream to the Full-Supply Level (FSL) or allowable free board level for sustainable power generation purposes. In such cases, canal banks in the upstream shall be adequately strengthened by the Company to the satisfaction of the Government. The Company shall have no right to claim any compensation from HAREDA or any other developer for exploitation of potential upstream or downstream of the site allotted to him. The Company shall satisfy themselves with hydrological datas and pattern of discharge which vary according to irrigational requirements in canals and distributors. Considering these parameters, the Company may structure the power plants at their own risk. HAREDA or the Government shall in no way be responsible for decreased/increased generation accruing as a result of these variations in canal flow. Neither party shall be considered to be in default under this MOU or any breach of the terms due to the imposition of restrictions or onerous regulations by any Government or statutory authority or agency or other cause beyond its reasonable control. It was also agreed that if at any 4 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 5 time, there shall arise any dispute, doubt, difference or question with regard to the interpretations or in respect of the rights, duties and liabilities of the parties hereto in any way touching upon or arising out of or otherwise in relation to this MOU every such dispute, doubt, difference or question shall be required to be referred to a third party in accordance with the provisions of the Arbitration and Reconciliation Act, 1996. All legal proceedings, if any, relating to the agreement shall be subject to the territorial jurisdiction of competent civil courts at Chandigarh. [5]. Power Purchase Agreement was executed on 13.08.2010 between petitioner No.2 and Haryana Power Purchase Centre, Shakti Bhawan, Sector 6, Panchkula. Mutual covenants and conditions were set forth and agreed by the parties. Article 12 of the aforesaid Power Purchase Agreement deals with disputes and arbitration. Article 15 of the aforesaid Agreement deals with Force Majeure. Petitioners made investments. Designs were made in accordance with the allotted design discharge and head and the projects were commissioned at Mussapur and Khukhni on 17.06.2011 and 30.09.2011 respectively. As per clause 13.1 of Article 13 of the Power Purchase Agreement, the agreement shall continue to be in force for a period of 25 years from Date of Commercial operation and can be extended by another Ten (10) years 5 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 6 through mutual agreement.
[6]. In pursuance of the approval granted by the HAREDA, it was decided to enhance the electricity production capacity on both the projects at Mussapur and Khukhni to the extent of 700 KW in each projects after taking concurrence and acceptance from the Alternate Hydro Energy Center (AHEC), Indian Institute of Technology, Roorkee. Accordingly HAREDA issued a letter to the petitioners allowing the petitioners to enhance the electricity production capacity on both the projects at Khukhni and Mussapur vide letter dated 18.01.2011. However, extension in time in respect of 3rd unit (700 KW) was declined by HAREDA vide letter dated 28.09.2018.
[7]. Decision was also taken by the Government of Haryana to invite independent power producers to execute projects at Khajuri and Mainmatti for which proposals were submitted by the producers. MOUs were also signed and detailed reports were also submitted, but these projects were cancelled. Implementation of proposal of 3rd unit at Khukhni and Mussapur was not considered by the HAREDA. The existing design discharge capacity of the augmentation canal is 4500 cusecs which is proposed to be enhanced to 6000 cusecs after remodelling.
[8]. Respondents issued notice inviting bids for remodelling 6 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 7 of augmentation canal from KM 0-75.250 i.e. Hamida Head to Picholia Head. Petitioners laid challenge to the notice dated 01.01.2021 in CWP No.2931 of 2021 titled 'POM Hydro Energy Ltd. & Anr. vs. State of Haryana and others'. The aforesaid writ petition was disposed of when learned counsel for the petitioners made a prayer for grant of liberty to invoke arbitration clause. The writ petition was disposed of accordingly with a liberty to invoke arbitration clause vide order dated 10.02.2021 by the Division Bench of this Court. Thereafter the petitioners challenged the same order by way of filing SLP(C) No.8104 of 2021 before the Hon'ble Apex Court and the same was disposed of vide order dated 01.07.2021. The order reads as under:-
"Having heard Mr. Dushyant Dave, learned senior counsel, for sometime, we are of the view that he can withdraw this petition in order to seek a review of the order of the High Court. In the event of the review being dismissed, it is open for his client to challenge the original order as well.
Ordered accordingly."
[9]. In pursuance of the order dated 01.07.2021 passed by the Hon'ble Apex Court, a review application beairng No.RA-CW No.189 of 2021 in CWP No.2931 of 2020 was filed before the Division Bench of this Court with the averment that infact there was no arbitration agreement between the parties and, 7 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 8 therefore, the statement made by the counsel for the petitioner for invoking the arbitration clause was erroneous and was due to inadvertence and a mistaken belief. Learned Addl. A.G. Haryana submitted before the Court that the petitioners would be free to invoke the arbitration clause qua the disputes that arise in relation to and out of the arbitration agreement/MoU between the parties. However as regards their grievance, if any, against the NIT, he fairly submitted that the same being independent of the contract/MoU and non-arbitral, therefore, the State would have no objection if the petitioners are granted leave to avail the remedies as shall be admissible to them in this regard. The review application was disposed of vide order dated 06.10.2021 thereby modifying the order dated 10.02.2021 in terms of the statement made by learned counsel for the parties. [10]. The augmentation canal was constructed during the year 1971-72 with design discharge of 3240 cusecs. The design discharge was further raised to 4500 cusecs during the year 1977. With the passage of time, due to continues running of water some wears and tears took place and running capacity of the augmentation canal has reduced considerably upto 3000- 3200 cusecs at present. As a result of the aforesaid reduction in the running capacity, acute shortage of water in southern Haryana has taken place. Number of Districts of Haryana have 8 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 9 been placed in dark zones due to depleting ground water. Government of Haryana took a decision to remodel the WJC system in order to enhance its designed capacity so as to minimise the losses and also to utilize surplus water to quench the thirst of water deficit in southern Haryana and also to ensure equitable distribution of water throughout the State. Power Project has major canals namely Augmentation Canal, Parallel Delhi Branch, JLN Canal, Bhalaut Sub Branch, Hansi Canal etc. which are to be remodelled. Some of the major canals like Western Jamuna Canal (Main Line Lower) and Western Jamuna Canal (Main Branch) have already been remodelled during the year 2019-20. Augmentation Canal is sought to be remodelled. Work of remodelling of canal has been allocated to agency M/s Kunal Infra Engineers Pvt. Limited. [11]. Since the work of remodelling was allocated to agency M/s Kunal Infra Engineers Pvt. Limited, a letter was issued from the office of XEN, Indri, Karnal on 13.04.2021 intimating that supply in the augmentation canal will be stopped shortly as work for remodelling has been allotted to the agency and the agency was about to start the work for the approval of the blind closure. The Government of Haryana had come up with the Notification dated 05.05.2021, whereby in pursuance of Rule 77 of the Haryana Canal & Drainage Rules, 1976 read with Section 39 of 9 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 10 the Haryana Canal Drainage Act, 1974 notified for the canal to remain closed from 05.05.2021 to 30.06.2021 for repairs and other emergent works on account of execution of work of re- modelling of augmentation canal. The communication was given to the petitioners vide letter dated 17.05.2021. Thereafter the petitioners filed CWP No.10758 of 2021 challenging the notification dated 05.05.2021. The said writ petition was disposed of vide order dated 04.06.2021 by passing the following order:-
"The petitioners have assailed the notification dated 5.5.2021 (Annexure P-1), issued under Rule 77 of the Haryana Canal and Drainage Act, 1974, that postulates that canal for execution of work of re-modelling of augmentation canal from Hamida head to Picholia head will remain closed from 5.5.2021 to 30.6.2021, for repairs and other emergent works.
The petitioners are running two micro hydro projects at Khukhni and Mussapur and are using the canal water for generation of power. The limited grievance that they have is that owing to closure of the canal, their operations and business activities shall be severely impacted.
Mr. Ankur Mittal, learned Additional Advocate General, Haryana, submits that the matter is already being examined and he has been instructed to submit that in case the petitioners move the authorities qua their concerns and grievances, as set out in the petition, the same shall be considered and dealt with by the Additional Chief Secretary
10 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 11 (Irrigation and W.S.), and appropriate orders, after affording an opportunity of hearing to all the stakeholders, shall be passed.
To this, learned senior counsel for the petitioners submits that let this petition be disposed of, in terms of the statement made by the learned Additional Advocate General, but the authorities be required to pass necessary orders within a specified time.
Accordingly, the petition is disposed of in terms of the statement of the learned State counsel, to enable the respondent authorities to examine and deal with the matter in the right earnest, and take an appropriate decision, preferably within 4 weeks from today. However, if any cause of action still survives, the petitioners shall be at liberty to avail the remedies, as shall be admissible in law.
Needless to assert that this order shall not constitute any expression of opinion on the merits of the case of either party."
[12]. It is only thereafter the impugned speaking order dated 01.07.2021 came to be passed by respondent No.1. Augmentation canal is a bottleneck in this project and the work of remodelling has already been allotted and the work is in progress. Government of Haryana has approved closure in augmentation canal for execution of work of remodelling of augmentation canal w.e.f. 05.05.2021 to 30.06.2021. The canal is being reconstructed in accordance with the revised approved L-section for 6000 cusecs capacity. Respondent No.1 has declined the claim of the petitioners on the ground that as per 11 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 12 Clause 8 of the MOU signed between HAREDA, Haryana Irrigation Department and petitioner No.2, the Government shall allow pondage to be created in the upstream to the Full Supply Level (FSL) or allowable free board level for sustainable power generation purposes. In such cases canal banks in the upstream shall be adequately strengthened by the company to the satisfaction of the Government. Respondent No.1 also emphasized at clause 20 of the MOU that the Company should have no right to claim or compensation from HAREDA or any other developer for exploitation of potential upstream or downstream of the site allotted to him. Company shall satisfy themselves with hydrological datas and pattern of discharge, which may vary according to irrigational requirements in canals and distributors. Considering these parameters, company may structure the power plants at their own risk. HAREDA or the Government shall in no way be responsible for decreased/increased generation accruing as a result of these variations in canal flow.
[13]. Respondent No.1 has taken note of the fact that due to decrease in the flow of water, southern Districts of Haryana have become dark zone due to underground scarcity of water. The closure of augmentation canal be intimated by the company well in time. The remodelling in any case shall increase the 12 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 13 capacity of canal and eventually it will be beneficial to the petitioners as the existing capacity would be increased from 2800 KW and they will be able to generate 33% extra power by enhancing capacity by 1400 KW by setting up of their 3 rd unit for which civil work has been completed and NOC has been granted by the Department of Irrigation and Water Resources to HAREDA for the third unit subject to certain conditions. Respondent No.1 has declined the prayer of the petitioners for compensation in view of clause 20 of the MOU. The petitioners should contribute in strengthening and remodelling the canal at upstream and downstream upto the distance they are heading water for generation of power because in long run remodelling shall be beneficial to them as their power generation and revenue shall increase by 33%.
[14]. Learned Senior counsel for the petitioners admitted that the present litigation is non-adversarial litigation. The remodelling work is also justified in its place in the larger interests of inhabitants of southern Districts of Haryana. At the same time, the closure would inflict financial damage to the petitioners. In such situation, the clauses of the MOU would definitely come to address the issue.
[15]. During course of arguments, an effort was also made by the Court to resolve the controversy by way of good office of 13 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 14 learned Advocate General, Haryana. Notice of motion was also issued to explore possibility of resolution for running of plants alongside the process of augmentation of the canal. The parties were directed to give suggestion, if any, possible solution of the issue.
[16]. Learned Advocate General, Haryana submitted that the issue cannot be resolved by way of deferment of the project. The remodelling of augmentation canal is an issue of emergent nature in order to improve status of dark zone of different Districts in Haryana. The remodelling work is in the larger public interest. The lease period of the petitioners is for 25 years. With the passage of time with increase water flow, the petitioners will be benefitted by way of increased capacity of canal and the same shall increase the capacity of existing 2800 KW. Petitioners will be in a position to generate 33% extra power by enhancing their capacity by 1400 KW. The remodelling in any case shall be beneficial to the petitioners as their power generation and revenue shall increase by 33%. [17]. Learned Advocate General, Haryana ultimately submitted that the issue relates to infrastructural policy and is not liable to be interfered with by way of injunctory relief. [18]. The attempt made by learned Senior counsel for the petitioners by way of suggesting possible resolution of dispute is 14 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 15 not acceptable to the State in view of infrastructural programme involving welfare of public at large as well as for future benefit of all stake holders. The plea of learned Senior counsel for the petitioners that water was not stopped during remodelling when the capacity was raised from 3240 KW to 4500 KW in the year 1977 has not been accepted by the State. The complete stoppage of canal for the definite period is the only solution for carrying out remodelling work within the time prescribed. [19]. Since the issue involved in this petition has arisen out of contractual obligation and even if the writ is maintainable in an appropriate case on the strength of Unitech Limited and others vs. Telangana State Industrial Infrastructure Corporation (TSIC) and others, CA No.317 of 2021 decided on 17.02.2021; and Union of India and others vs. Tantia Construction Private Limited, (2011) 5 SCC 697, but the interference in the present case is not justified as issue involved in the present writ petition is non-adversarial in nature, wherein act of the State is also found to be justified and at the same time petitioners have also to suffer on account of closure of the canal. Petitioners are bound by the terms and conditions of the MOU and other related documents executed between the parties, wherein the terms and conditions have been formulated so as to cover the present state of affair.
15 of 16 ::: Downloaded on - 22-04-2022 01:16:02 ::: CWP No.12870 of 2021 (O&M) 16 [20]. Maintainability of writ petition is not in dispute in view of ratio(s) laid down in the aforesaid precedents, but at the same time in view of apparent facts on record, the issue is such which cannot be adequately answered in the present writ petition. Petitioners would be at liberty to take recourse to the remedy, if any available in terms of rights and obligations arising out of MOU and other related documents inter se between them. [21]. In view of aforesaid facts of the case, no interference is called for in the writ jurisdiction of this Court. This writ petition is accordingly dismissed. All pending civil misc. applications are accordingly disposed of.
(RAJ MOHAN SINGH)
April 19, 2022 JUDGE
Atik
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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