Karnataka High Court
B And G Energy Private Limited vs The State Of Karnataka on 22 October, 2018
Equivalent citations: AIRONLINE 2018 KAR 1138
Author: R Devdas
Bench: R.Devdas
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF OCTOBER, 2018
BEFORE
THE HON' BLE MR.JUSTICE R.DEVDAS
WRIT PETITION NOs.35179-35182 OF 2012 (GM-RES)
BETWEEN
B & G ENERGY PRIVATE LIMITED
NEW NO.25, OLD NO.10,
SRI MADHAVAN NAIR ROAD,
MAHALINGAPURAM,
NUNGAMBAKKAM,
CHENNAI-34
BY ITS AUTHORISED SIGNATORY.
... PETITIONER
(BY SRI D.N.NANJUNDA REDDY, SENIOR ADVOCATE
A/W SRI REUBEN JACOB, ADVOCATE)
AND
1. THE STATE OF KARNATAKA
DEPARTMENT OF ENERGY
MULTI-STORIED BUILDING,
DR. AMBEDKAR VEEDHI,
BANGALORE-560001,
BY ITS SECRETARY
2. KARNATAKA RENEWABLE
ENERGY DEVELOPMENT LIMITED
NO.19, MAJOR GENERAL
A.D.LOGANADAN INA CROSS,
QUEEN'S ROAD,
BANGALORE-560052.
BY ITS MEMBER SECRETARY.
... RESPONDENTS
(BY SRI. T.S. MAHANTESH, AGA FOR R1,
SRI. G.S. KANNUR, ADVOCATE FOR R2)
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THESE WRIT PETITIONS ARE FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE COMMUNICATION ISSUED BY KARNATAKA
RENEWABLE ENERGY DEVELOPMENT DATED 13.8.12 VIDE
ANNEXURE-N TO THE WP AND DECLARE THAT THE ACTION
OF THE R2 IN LEVYING THE ENHANCED APPLICATION FEE
AND DPR PROCESSING FEE AS PER THE G.O. DATED
13.10.09 VIDE ANNEXURE-J AS ILLEGAL AND CONTRARY TO
LAW.
THESE PETITIONS COMING ON FOR FINAL HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
R.DEVDAS J., (ORAL):
The petitioner company is in the business of setting up power plants for generation of electricity and supply to the electricity boards as well as private sector. The 2nd respondent-Karnataka Renewable Energy Development Limited (for short KREDL), which is part of the Department of Energy of Government of Karnataka, promotes private entrepreneurs in setting up such power plant for generation of electricity for the benefit of the citizens of the State. In terms of the policy of the State Government, the petitioner made application along with Detailed Project Report (DPR) identifying four locations along the Tungabhadra River in Gangavathi 3 Taluk, Koppal Village for setting up four mini hydel power plants. The applications were made in the month of August and October 2007.
2. The petitioner submits that along with the application, the requisite application fee at the rate of Rs.5,000/- per MW and DPR processing fee at the rate of Rs.25,000/- per MW (subject to minimum of Rs.1,00,000/-) was paid in full as per then prevailing rates, to the 2nd respondent herein. The petitioner submits that the applications were processed and the State government was pleased to accord sanction to the proposed power projects and in that regard four Government Orders, all dated 19.01.2010, were issued according approval to the proposed projects.
3. When the matter stood thus, the 2nd respondent KREDL called upon the petitioner to get the agreement executed by issuing a communication dated 13/15.08.2012. But while calling for the execution of the agreement, KREDL informs the petitioner that the Government of Karnataka had 4 enhanced the DPR processing fees and therefore called upon the petitioner to pay the balance DPR processing fees etc., at the rate of Rs.2,00,000/- per MW instead of Rs.25,000/- per MW. The petitioner being aggrieved of the demand made by the KREDL, is before this Court calling in question the communication dated 13/15.08.2012.
4. Sri D.N.Nanjunda Reddy, learned Senior Counsel submits that the impugned communication is illegal and arbitrary and therefore needs to be quashed and set aside. The learned Senior Counsel points out that the applications were made by the petitioner company in the month of August and October 2007 along with all the necessary application fees, DPR processing fees etc., at the rates prevailing as on the date of application. More-over the State Government itself has accorded approval by Government Order dated 19.01.2010 and therefore it is submitted that the 2nd respondent KREDL could not have called upon the petitioner to make payment 5 at the enhanced rate, which is not applicable to the petitioner in the facts and circumstances of the case.
5. Sri G.S.Kannur, learned counsel appearing for the respondent No.2 - KREDL submits that the draft agreement itself provides a clause i.e., clause 21, which stipulates that the agreement shall be subject to the guidelines issued by the Government of India and State Government from time to time. It provides that the agreement is signed subject to the acceptance that any changes that may be suggested by the Government in future shall prevail. The learned counsel points out from the communication dated 13/15.08.2012 that the 2nd respondent has supplied reasons for calling upon the petitioner to pay DPR processing fees at the enhanced rate, which is in terms of the fees structure provided by the State Government, from time to time. It is stated in the communication that the said clause clearly explains that the project developer had accepted the changes/modifications regarding 6 renewal energy project, whenever the Government of India or State Government brings any changes. The Government of Karnataka had made several changes and therefore justifies the impugned communication which is in terms of the changes brought about in the fees structure by the State Government.
6. Having heard all the parties concerned, what emerges is that the State Government has brought about sweeping changes in the matter of fixations of process fees. By Government Order No.EN 392 NCE 2008, Bengaluru dated 26.06.2009, the DPR processing fees is enhanced from Rs.25,000/- per MW to Rs.5,00,000/- per MW. By Government Order No.EN 392 NCE 2008, Bengaluru, dated 13.10.2009, the DPR processing fees was reduced from Rs.5,00,000/- per MW to Rs.2,00,000/- per MW. In the said Government Order a clause was also introduced permitting refund of the difference of fees paid in accordance with the Government Order dated 26.06.2009 and 13.10.2009. Again by 7 Government Order No.EN 61 NCE 2010, Bengaluru dated 06.07.2010, in partial modification of the earlier Government Order, the processing fees was further reduced from Rs.2,00,000/- per MW to Rs.1,00,000/- per MW.
7. On a close reading of these Government Orders, it is quite evident that the sudden enhancement of process fee from Rs.25,000/- per MW to Rs.5,00,000/- per MW was found to be unreasonable and impracticable and therefore the State Government itself proceeded to reduce the DPR processing fees from Rs.5,00,000/- per MW down to Rs.1,00,000/- per MW.
8. During the course of the arguments, the learned counsel for KREDL submitted that as per the terms and conditions of the applications, the applicants who made the applications are required to submit pre-feasibility report and the DPR processing fees that was paid along with the application was subject to the Detailed Project Report being approved 8 by KREDL. The learned counsel therefore submits that the terms and conditions, when read completely, makes it very clear that processing fees paid by the applicants is only initial payment which is subject to the approval of the detailed project report. Specific reliance is placed on clause 4 and 5 of the terms and conditions to buttress the arguments of the learned counsel that the initial payment made by the applicants is only towards the pre-feasibility report. The learned counsel therefore submits that clause 5 makes it clear that the applicants are required to pay the difference between the initial processing fee paid and the fee required to be paid on finalization of the Detailed Project Report as provided under Clause 13 of the terms and conditions. It is further submitted that the allotment itself makes it very clear that the applicant is required to make payment as per the relevant provisions in operation as on the date of the allotment. The learned counsel points out that in the case of the petitioner the allotment was made on 19.01.2010, while the Government Order which 9 brought in the amendment to the fees structure is dated 13.10.2009 brought into effect from 01.10.2009 and made applicable to all allotments made after 01.10.2009.
9. On the other hand, leaned Senior Counsel submitted that the respondents are bound by the Government Order dated 19.01.2010, whereby approval was accorded by the State Government to the project submitted by the petitioner. It is also pointed out from the preamble portion of the Government Order dated 19.01.2010 that the proposal was placed before the allotment committee in its meeting held on 23.10.2009 and the committee recommended allotment of the mini hydel scheme in favour of the petitioner. The learned Senior Counsel further submitted that the petitioner could not be blamed as there was no fault on the part of the petitioner. Whatever was the fees fixed as on the date of the application, the petitioner has paid the entire processing fee in the month of August and October 10 2007 itself. The learned Senior Counsel further points out from the records that no sooner the petitioner was called upon to execute the agreement, immediately the petitioner approached the 2nd respondent seeking execution of the agreement within 45 days from the date of the Government Order. At that juncture, the 2nd respondent seems to have forwarded the draft of the agreement, however calling upon the petitioner to pay the difference of the DPR processing fee in the light of the Government Order dated 13.10.2009. Thereafter the petitioner seems to have written back to the respondents seeking clarification as to why the petitioner should pay the difference amount. It was only in the month of January, 2012 vide letter dated 23.01.2012, the 2nd respondent called upon the petitioner to pay the difference amount as detailed in the communication. Thereafter, the impugned communication was issued to the petitioner.
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10. On overall reading of the situation, what this Court finds is that on its own showing, the respondents, State Government and KREDL, have reduced the DPR processing fee which was enhanced from Rs.25,000/- per MW to Rs.5,00,000/- per MW. It was also acknowledged that on the request made by the Renewable Energy Developers, the State Government found it appropriate to reduce the DPR processing fee from Rs.5,00,000/- per MW to Rs.2,00,000/- per MW and thereafter Rs.1,00,000/- per MW. Keeping the fact that the petitioner has made payment way back in the year 2007 itself and the fact that the State Government itself has reduced the DPR processing fee from Rs.2,00,000/- per MW to Rs.1,00,000/- per MW, a suggestion was infact putforth to both the parties to settle the issue by accepting the fact that the State Government itself has reduced the DPR processing fee from Rs.2,00,000/- per MW to Rs.1,00,000/- per MW. The petitioner has come forward to pay at the rate of Rs.1,00,000/- per MW without further agitating the 12 issue. This arrangement is found to be equitable because the petitioner had made payments way back in the year 2007 itself and though the relevant Government Order that was made applicable as on the date of the allotment stipulates DPR processing fee at the rate of Rs.2,00,000/- per MW, but in the subsequent Government Order, State Government itself reduced from Rs.2,00,000/- per MW to Rs.1,00,000/- per MW. This arrangement is in the interest of both the parties. Public interest is also kept in mind when this Court considers it necessary to fix and direct the petitioner to pay the DPR processing fee at the prevailing rate i.e., Rs.1,00,000/- per MW and immediately start the project which is in the interest of the general public.
11. This order and arrangement shall be confined to the case of the petitioner and the petitioner in W.P.No.25407/2010 only. This becomes necessary as these petitioners have approached this Court at the earliest point of time and this order shall 13 not come to the rescue of other similarly placed applicants, who did not approach this Court.
12. With these observations, these petitions are allowed-in-part. The respondents are directed to collect the DPR processing fee etc., at the prevailing rate as per the Government Order dated 6.7.2010. No order as to costs.
13. It is made clear that the respondents shall not impose any penalty for the period during which the petitioner was before this Court. The parties will be governed by the provisions of the agreement and violation of any condition would attract the provisions of the agreement that will be entered into between the parties.
SD/-
JUDGE KLY/