Punjab-Haryana High Court
Talwandi Sabo Power Limited vs Union Of India And Others on 4 July, 2022
Author: Raj Mohan Singh
Bench: Raj Mohan Singh
CWP Nos.7519 and 7715 of 2020(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Reserved on 16.05.2022
Date of Decision-04.07.2022
1. CWP No.7519 of 2020(O&M)
Talwandi Sabo Power Limited ... Petitioner
Versus
Union of India and others ... Respondents
2. CWP No.7715 of 2020(O&M)
Nabha Power Limited ... Petitioner
Versus
State of Punjab and others ... Respondents
CORAM:-HON'BLE MR. JUSTICE RAJ MOHAN SINGH
Present: Mr. Ashwani Chopra, Sr. Advocate with
Ms. Rupa Pathania, Advocate,
Mr. Satyaveer Singh, Advocate,
Mr. Vidul Kapoor, Advocate and
Mr. Aditya Swaroop, Advocate
for the petitioner in CWP No.7519 of 2020.
Mr. Akshay Bhan, Sr. Advocate with
Mr. A.S. Talwar, Advocate
for the petitioner in CWP No.7715 of 2020.
Mr. Satya Pal Jain, Addl. Solicitor General of
India with Mr. Ajay Kalra, Central Govt. Counsel
for the Union of India.
Mr. C.L. Pawar, Sr. DAG, Punjab.
Mr. Pankaj Mulwani, DAG, Haryana.
Mr. Abhilaksh Grover, Advocate
for PSPCL.
Mr. Sehaj Bir Singh, Advocate
for PSTCL.
***
RAJ MOHAN SINGH, J.
1 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 2 [1]. Vide this common order/judgment, CWP No.7519 of 2020 titled Talwandi Sabo Power Limited Vs. Union of India and others and CWP No.7715 of 2020 titled Nabha Power Limited are being decided. Since common questions of law and facts are involved, therefore, common fact are being noticed.
[2]. In both the cases, identical power purchase agreements were executed. In CWP No.7519 of 2020, agreement was executed on 01.09.2008, whereas in CWP No.7715 of 2020, agreement was executed on 18.01.2010. The terms and conditions of both the power purchase agreements are identical.
[3]. In CWP No.7519 of 2020, petitioner seeks issuance of an appropriate writ in the nature of certiorari or any other appropriate direction to quash notices dated 29.03.2020 and 14.04.2020 issued by Punjab State Power Corporation Limited/respondent No.3 and also notice and E- mail dated 16.05.2020 issued by respondent No.4 in the context of denying the petitioner's right/lawful payments in lieu of capacity charges under power purchase agreement dated 01.09.2008. Further directions are sought against respondent No.4 to correct the State Energy Account (SEA) for the month of March and April 2020, thereby correctly reflecting the declared capacity of the petitioner's plant.
2 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 3 [4]. In CWP No.7715 of 2020, petitioner seeks issuance of an appropriate writ in the nature of certiorari, seeking quashing of State Energy Account (SEA) for the month of March 2020 (to the extent of 30th March 2020 and 31st March 2020) and April 2020 issued by Punjab State Load Dispatch Centre/respondent No.4 to the extent that the declared capacity/availability of the petitioner's project has been declared as zero being illegal and factually incorrect. Further petitioner seeks quashing of notices dated 29.03.2020 and follow up letters dated 14.04.2020, 13.05.2020 and 20.05.2020 issued by the Punjab State Power Corporation Limited (PSPCL)/respondent No.2 to the petitioner, requesting the petitioner not to declare availability from its project and also stating that Punjab State Power Corporation Limited is relieved from making payment of capacity charges and Late Payment Surcharge (LPS) on delayed payment of invoice to the petitioner on the ground of provisions in the power purchase agreement dated 18.01.2010. Further directions are sought against respondent No.2 to pay capacity charges to the petitioner in terms of provisions of power purchase agreement dated 18.01.2010 and also to quash E-mail notices dated 01.04.2020, 02.04.2020, 29.05.2020 and similar notices issued on daily basis by Punjab State Load Dispatch Centre/respondent No.4, refusing to issue dispatch instructions to the petitioner being illegal and against law.
3 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 4 Necessary directions are sought against respondent No.4 i.e. Punjab State Load Dispatch Centre to correct the State Energy Account for the months of March and April 2020, thereby reflecting correct declared capacity/availability of the petitioner's project.
[5]. Petitioners are generating companies under Section 2(28) of the Electricity Act, 2003. Petitioners have executed power purchase agreements for supply of power from their thermal power plants to Punjab State Power Corporation Limited (PSPCL) through its Managing Director, The Mall, PSEB, Head Office, Patiala. Power purchase agreement in terms of its Article 1 defines Allocated Contracted Capacity, which means the Contract Capacity allocated to the Procurer/PSEB/PSPCL as provided in Schedule 13 thereof subject to adjustment as per the terms of the agreements. The aforesaid Schedule 13 shows that Contract Capacity allocated to PSEB/PSPCL/Procurer is 100%. Availability Based Tariff (ABT) shall mean all the regulations contained in the Central Electricity Regulatory Commission (terms and conditions of Tariff) Regulations, 2004 as amended from time to time. Availability factor shall have the meaning ascribed thereto in Availability Based Tariff (provided that in place of installed capacity and normative auxiliary consumption it shall be Contractual Capacity).
4 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 5 Availability Capacity shall have the meaning ascribed thereto in Availability Based Tariff (ABT).
[6]. Capacity Charge shall have the meaning ascribed thereto in Schedule 7. Declared Capacity in relation to a Unit or the Power Station at any time means the net capacity of the Unit or the Power Station at the relevant time (expressed in MW at the Interconnection Point) as declared by the Seller in accordance with the Grid Code and dispatching procedures as per the Availability Based Tariff.
[7]. Force Majeure Event shall have the meaning ascribed thereto in Article 12.3(ii)(1). Dispatch Instruction means any instruction issued by the Procurer through the SLDC to the Seller, in accordance with applicable Grid Code and the agreement.
[8]. Grid Code/IEGC means any set of regulations issued by Appropriate Commission as amended from time to time and legally binding on the Seller's and the Procurer's governing the operation of the Grid System or any succeeding set of regulations/code.
[9]. Quoted Tariff shall mean the sum total of Quoted Energy Charges and Quoted Capacity Charge. Quoted Energy Charge shall mean the Charge derived from the Net Quoted Heat Rate. Quoted Capacity Charge shall mean the 5 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 6 sum total of Quoted Non Escalable Capacity Charge and Quoted Escalable Capacity Charge. Quoted Non Escalable Capacity Charge and Quoted Escalable Capacity Charge shall have the meaning as ascribed thereto in Schedule 11. [10]. Power Purchase Agreement prescribed a two-fold tariff regime i.e. Capacity Charges paid to the generating company on the basis of Declared Availability of the generating company irrespective of whether PSPCL and SLDC have scheduled electricity or not. Energy Charges are paid to the generating company on the basis of Scheduled Generation (the actual electricity supplied). [11]. On 22.03.2020, Government of Punjab ordered a State- wide lockdown due to COVID-19 outbreak. The electricity falling under the category of essential services was exempted from shut down order and it was ordered that the restrictions shall not be applicable on such essential services. [12]. On 24.03.2020, Government of India, Ministry of Home Affairs while exercising powers under Disaster Management Act, 2005 passed an order restricting activities. Power generation, transmission and distribution units and services were kept as essential services. [13]. On 25.03.2020, Ministry of Power, Government of India (MOP) also issued an order, directing all the State 6 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 7 authorities to ensure smooth and uninterrupted power. On 27.03.2020, Ministry of Power issued another order in relation to its earlier order dated 28.06.2019 regarding payment security mechanism through Letter of Credit. Ministry of Power vide its order dated 28.03.2020 under Section 107 of the Electricity Act, directed the Central Electricity Regulatory Commission (CERC) that for those projects covered under Section 63 of the Electricity Act like the petitioner projects, DISCOMs may claim relief as per force majeure provisions in the respective power purchase agreements. [14]. On 29.03.2020, Punjab State Power Corporation Limited issued two force majeure notices to the petitioners requesting the petitioner not to declare availability of their project under the agreements. It was conveyed that PSPCL was not obliged to pay and disburse capacity charges and Late Payment Surcharge (LPS) to the petitioners under the agreements in view of purported lower demand from the consumers of State of Punjab. On 30.03.2020, Department of Power, State of Punjab issued an order under Section 108 of the Electricity Act, 2003 to the Punjab State Electricity Regulatory Commission (PSERC) to treat the spread of COVID-19 pandemic and consequent lockdown as a force majeure event.
7 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 8 [15]. Petitioners contested the declaration of force majeure on the ground that the event purportedly claimed by PSPCL as a force majeure event does not fall under any of the force majeure events listed under Article 12.3 of the Power Purchase agreements. PSPCL has no cause of action to issue the notice invoking Article 12 of the Power Purchase Agreement as there is no specific clause under the aforesaid Article 12.3 under which the restrictions can be imposed by the Government of Punjab for constituting a force majeure event. Even PSPCL is not an affected party under Article 12.3 of the Power Purchase Agreement. The alleged force majeure event does not prevent PSPCL from scheduling/procuring power from generating plants. PSPCL even continues to schedule power from several other counterparties with which power purchase agreements were executed. In the present cases, PSPCL has failed to establish existence of force majeure event.
[16]. In case of Talwandi Sabo Power Limited, State Load Dispatch Centre due to invocation of force majeure, issued notice/E-mail dated 16.05.2020 and stopped scheduling the power from the petitioner without treating the declared availability of the petitioner for the purposes of preparing the State Energy Account in accordance with State 8 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 9 Grid Code. As a result of that, the petitioner has been denied its right to capacity charges.
[17]. In case of Nabha Power Limited, State Load Dispatch Centre stopped issuing dispatch instructions to the petitioner from 29.03.2020. Petitioner declared its capacity and capability to produce electricity as per law. State Load Dispatch Centre sent E-mail dated 01.04.2020 to the petitioner on the ground that notice regarding curtailing of power under force majeure condition in view of provisions of power purchase agreement has already been given to the petitioner by PSPCL on 29.03.2020 and subsequently PSPCL is not giving any requirement since the date of issue of said notice and accordingly schedule is not being provided in the absence of requirement from PSPCL.
[18]. State Load Dispatch Centre did not issue the dispatch instructions even on 02.04.2020 and reiterated the stand that in the absence of PSPCL giving any requirement, State Load Dispatch Centre is unable to provide dispatch instructions to the petitioner. Petitioner replied to the E-mail of State Load Dispatch Centre that in case of no demand of power from PSPCL, State Load Dispatch Centre is obligated to issue dispatch instructions as State Load Dispatch Centre is an independent authority having defined obligations and duties in law. Even in cases of other generating companies, 9 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 10 State Load Dispatch Centre continued to accept the declared capacity of Inter-State Generating Stations (ISGS) supplying power to respondent No.2, even though similar force majeure notices were issued by PSPCL in those cases also. [19]. On 06.04.2020, Ministry of Power issued an order, clarifying that notwithstanding the lockdown, the obligation to pay for capacity charges as per power purchase agreement shall continue. Despite the aforesaid order, PSPCL and SLDC did not act in accordance with law. The aforesaid letter dated 06.04.2020 was in consonance with Section 107 of the Electricity Act, 2003, which prescribed that in the discharge of its functions, the Central Commission shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing.
[20]. Thereafter, on 07.04.2020, Punjab State Electricity Regulatory Commission in Suo-Moto Petition No.11 of 2020 also took cognizance of Late Payment Surcharge (LPS) order issued by the Department of Power, Government of Punjab. For power generating companies whose tariff has been adopted by the Commission under Section 63 of the Act, the Punjab State Electricity Regulatory Commission directed that PSPCL may claim relief from its obligations regarding the rate 10 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 11 at which LPS is to be paid as per the force majeure provisions given in the respective power purchase agreements. [21]. The stand of the PSPCL is that force majeure event has led to a situation where PSPCL is unable to perform its obligations under the agreement and therefore, it would not be liable to pay any amount towards capacity charges. [22]. In case of Nabha Power Limited, State Load Dispatch Centre has issued State Energy Account for the month of April 2020 on 07.05.2020, wherein the declared capacity/availability of the petitioner's project was shown as zero for the entire month of April.
[23]. With this background on record, the present petitions have been filed for the reliefs claimed therein. [24]. After filing of the present petitions, matter came up for hearing on 22.07.2020 and following order was passed:-
"The matter has been taken up through video- conferencing in the light of the pandemic Covid-19 situation and as per instructions.
As per reply filed by respondent No.4-PSTCL, the impugned order passed by respondent No.3-(PSPCL) has been withdrawn vide memo dated 20.05.2020 as reflected in para No.6 of the reply and at this stage, the dispute remains with regard to capacity charges for about two months as noticed in order dated 29.05.2020.
11 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 12 After hearing the learned counsel for the parties, perusal of the record and considering the nature of issue in question, the Court feels that the matter needs detailed deliberations.
Admitted.
To be heard within three months after resumption of normal functioning of the Court.
In the meantime, the parties are free to explore if the issue in question can be settled amicably.
The petitioner is free to move any application in case the averments made in para No.6 of the reply is found to be against the record.
A photocopy of the order be placed on the connected file.
22.07.2020 (JITENDRA CHAUHAN) gsv JUDGE" [25]. Perusal of the aforesaid order would show that as
per stand taken by the State Load Dispatch Centre, the dispute remains only with regard to capacity charges. [26]. Learned counsel for the respondents have contested the claims of the petitioners on the ground that events of force majeure are fully applicable to the generating companies in view of unprecedented situation arising out of COVID-19 pandemic and the present writ petitions are not maintainable as the petitioners have alternative remedy under the Arbitration and Conciliation Act, 1996 as well as before 12 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 13 Punjab State Electricity Regulatory Commission in terms of Section 86 of the Electricity Act, 2003 read with Section 17 of the Power Purchase Agreements.
[27]. Learned counsel for Punjab State Power Corporation Limited and State Load Dispatch Centre have contended that Section 86 of the Electricity Act, 2003 is a special provision for adjudication of the disputes between the licenses and generating companies. Such disputes can be adjudicated upon either by the State Commission or by the person to whom its referred for arbitration. Section 86 of the Act is to override the general provision of the Arbitration and Conciliation Act, 1996.
[28]. Learned counsel for the respondents relied upon Gujarat Urja Vikash Nigam Ltd. Vs. Essar Power Ltd., 2008 AIR (Supreme Court) 1921, A.P. Power Coordination Committee and others Vs M/s Lanco Kondapalli Power Ltd. and others, 2016(3) SCC 468, M/s Adani Power Ltd. Vs. Gujarat Electricity Regulatory Commission and others, 2016(15) SCC 665, Chairman & Managing Director Southern Power Distribution Company of Andhra Pradesh Tirupati and others Vs. Sudalagunta Sugars Ltd., 2013 AIR (Andhra Pradesh) 1, State of Bihar and others Vs. Jain Plastics and Chemical Ltd., 2002(1) SCC 216, Union Construction Co. Pvt. Ltd. Vs. Chief Engineer 13 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 14 Eastern Command, Lucknow and another, 1960 AIR (Allahabad) 72, The Empire Jute Co. Ltd. and others Vs. The Jute Corporation of India Ltd. and another, 2007 (14) SCC 680, Booz Allen and Hamilton Inc. Vs. SBI Home Finance Ltd. and others, 2011(5) SCC 532, Rashtriya Ispat Nigam Ltd. and another Vs. M/s Verma Transport Company, 2006 (7) SCC 275 and Ashish Gupta Vs. IBP Co. Ltd. and another, 2006 AIR (Delhi) 57 and contended that the dispute between licenses and generating companies is to be decided by the State Commission or the Arbitrator nominated by it, whereas under Section 11 of the Arbitration and Conciliation Act, 1996, the Court can refer such disputes to an arbitrator appointed by it. Harmonious construction of the provisions of the Electricity Act 2003 and the Arbitration and Conciliation Act, 1996 would provide that whenever there is a dispute between a licensee and the generating companies, only the State Commission or Central Commission (as the case may be) or Arbitrator nominated by it, can resolve such a dispute, whereas all other disputes would be decided in accordance with Section 11 of the Arbitration and Conciliation Act, 1996. This is also evident from Section 158 of the Electricity Act, 2003. Power purchase agreement is a contract between the parties and terms of any contract are nothing but the agreed terms of the contracted parties and therefore, the claim arising out of contractual 14 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 15 obligations cannot be espoused in a writ jurisdiction. Any breach of contract cannot be made subject matter of writ. The contractual obligation and enforcement thereto, would give rise to the disputed questions of rival claims and for that, writ is not an appropriate Forum.
[29]. I have heard learned counsel for the parties and with their assistance have also perused the material on record.
[30]. Admittedly, the surviving claim is with regard to payment of capacity charges for the relevant period in both the writ petitions as per power purchase agreements. First of all, status/functions/obligations of State Load Dispatch Centre has to be highlighted in the present set of circumstances. Section 32 of the Electricity Act, 2003 deals with functions of State Load Dispatch Centre, which reads as under:-
"32. Functions of State Load Despatch Centres-(1) The State Load Despatch Centre shall be the apex body to ensure integrated operation of the power system in a State.
(2) The State Load Despatch Centre shall-
(a) be responsible for optimum scheduling and despatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State;
(b) monitor grid operations;
15 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 16
(c) keep accounts of the quantity of electricity transmitted through the State grid;
(d) exercise supervision and control over the intra- State transmission system; and
(e) be responsible for carrying out real time operations for grid control and despatch of electricity within the State through secure and economic operation of the State grid in accordance with the Grid Standards and the State Grid Code. (3) The State Load Despatch Centre may levy and collect such fee and charges from the generating companies and licensees engaged in intra-State transmission of electricity as may be specified by the State Commission."
[31]. State Load Dispatch Centre may give such directions and exercise such supervision and control as may be required for ensuring the integrated grid operations and for achieving the maximum economy and efficiency in the operation of power system in the State. All the persons connected with the operation of the power system viz. licensee, generating company and any other person connected with the operation of the power system, shall comply with the directions issued by the State Load Dispatch Centre under Section 33(1) of the Electricity Act, 2003. In turn, State Load Dispatch Centre shall comply with the directions of the Regional Load Dispatch System. In case of any dispute with reference to the quality of electricity or safe, secure and 16 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 17 integrated operation of the State Grid or in relation to any direction given under sub-Section (1) of Section 33 of the Act, it shall be referred to the State Commission for decision. [32]. As per Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013, State Load Dispatch Centre in addition to the functions as stated in Section 32 of the Electricity Act has functions including system operation and control including intra-state transfer of power, covering contingency analysis and operations planning on real time basis, scheduling/re- scheduling of generation, system restoration following grid disturbances, metering and data collection, compiling and furnishing date pertaining to system operation and operation of State Unscheduled Interchange (UI) pool account and State reactive energy account. The roles and responsibilities of State Load Dispatch Centre have been discussed in Section 2.3.1 of the aforesaid Regulations, 2013. [33]. State Load Dispatch Centre has the responsibility of implementing State Grid Code and shall not unduly discriminate against or unduly prefer any one or any group of persons or STU in the conduct of any business. [34]. Section 2.3.4 of Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013 deals with role of distribution licensee.
17 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 18 [35]. As per Section 2.3.4 (d) of the aforesaid Regulations, 2013, the distribution licensee shall inform the SLDC about the details of 15 minutes/hourly/daily/weekly/monthly demand and energy requirement and also contracts entered into for importing power from different sources and coordinate with SLDC in real time operation. It shall follow the directions of SLDC in scheduling its exchange of power and help in controlling the operation of the system by adjustment of drawal from the system. They shall take special care for drawal/injection of reactive power from/to the State Power System. [36]. As per Section 6.3.7 of the aforesaid Regulations, 2013, SLDC shall carry out its own demand estimation from the historical date and weather forecast data from time to time. All distribution licensees/users and other concerned persons shall provide relevant data and other information as required by SLDC for demand estimate. All distribution licensees/users shall provide to the SLDC their estimates of demand for the year ahead on monthly-basis at each inter connection point for the next financial year by 1st October each year. All distribution licensees/users shall also provide daily demand for the month ahead at each inter-connection point by 25th for the next month.
18 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 19 [37]. As per Section 6.3.8 of the aforesaid Regulations, 2013, all distribution licensees/users shall provide to SLDC on day ahead basis at 11.00 hours each day their estimated demand for each 15-minute block for the ensuring day along with the estimates of load that may be shed when required, in discrete blocks with the details of arrangements of such load shedding.
[38]. As per Section 11.2 of the aforesaid Regulations, 2013, State Grid Code deals with the procedures to be adopted for scheduling of the net injection/drawals of State Entities on a day ahead basis with the modality of the flow of information between the SLDC/ALDCs/Power Exchange and State Entities. The procedure for submission of capability declaration by each SGS/CPPs/IPPs and submission of requisition/drawal schedule by other State Entities is intended to enable SLDC to prepare the despatch schedule for each SGS/CPPs/IPPs and drawal schedule for each beneficiary/Distribution Licensee. It also provides methodology of issuing real time despatch/drawal instructions and rescheduling, if required, to State Entities along with the commercial arrangement for the deviations from schedules, as well as, mechanism for reactive power pricing. This code also provides the methodology for re-scheduling of wind and solar energy on three (3) hourly basis and the 19 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 20 methodology of claiming the Renewal Regulatory charge for dealing with the variable generation of the wind and solar energy stations within State. For this, appropriate meters and Data Acquisition System facility (for real time as well as stored data) shall be provided for accounting of UI charges and transfer of information to SLDC.
The provisions contained in this Part are without prejudice to the powers conferred on SLDC under Sections 32 and 33 of the Electricity Act, 2003.
[39]. As per Section 11.3.3 of the aforesaid Regulations, 2013, despatch instructions to SGS shall be in standard format to be finalized by SLDC. These instructions will recognize declared availability and other parameters that have been made available by the SGS to SLDC. These instructions shall include time, Power Station, Generating Units (Total export in case of CPP), name of operators sending and receiving the same. Standard despatch instructions may include:-
o To switch a SGS into or out of Service; o To schedule generation;
o Details of reserve to be carried on a unit; o To increase or decrease MVAR generation to maintain voltage profile as per unit capability at that time;
20 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 21 o To begin pre-planned Black Start procedures; o To hold spinning reserve;
o To hold Generating Units of SGS on standby; o To control MW/MVAR Drawal.
[40]. As per Section 11.3.12 of the aforesaid Regulations, 2013, it shall be incumbent upon the SGS to declare the plant capabilities faithfully i.e., according to their assessment. In case, it is suspected that they have deliberately over/under declared the plant capability contemplating to deviate from the schedules given on the basis of their capability declarations (and thus make money either as undue capacity charge or as the charge for deviations from schedule), the SLDC may serve the notice and ask the SGS to explain the situation with necessary backup data.
[41]. As per Section 11.3.13 of the aforesaid Regulations, 2013, the SGS shall be required to demonstrate the declared capability of its generating station as and when asked by the SLDC. In the event of the SGS failing to demonstrate the declared capability, the capacity charges due to the generator shall be reduced as a measure of penalty. The quantum of penalty for the first mis-declaration for any duration/block in a day shall be the charges corresponding to 21 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 22 two days fixed charges. For the second mis-declaration the penalty shall be equivalent to fixed charges for four days and for subsequent mis-declarations, the penalty shall be multiplied in the geometrical progression over a period of a month.
[42]. As per Section 11.3.17 of the aforesaid Regulations, 2013, the SLDC shall be responsible for computation of actual net injection/drawal of concerned Users, 15 minute-wise, based on the above meter readings. Subsequently, SLDC will prepare and issue the Unscheduled Inter-change (UI) account. All computations carried out by SLDC shall be open to all entities for checking/verifications for a period of 15 days. In case any mistake/omission is detected, the SLDC shall forthwith make a complete check and rectify the same.
[43]. As per Section 11.3.18 of the aforesaid Regulations, 2013, the operating log books of the generating station shall be available for review by the SLDC. These books shall keep record of machine operation and maintenance.
[44]. As per Section 12.3 of the aforesaid Regulations, 2013, State Load Dispatch Centre has the following responsibilities:-
22 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 23 12.3.1 SLDC shall monitor actual power drawal against scheduled power drawal and regulate internal generation and demand to maintain this schedule. SLDC shall also monitor reactive power drawal and availability of capacitor banks.
12.3.2 Generating Stations within Punjab, other than ISGS and of BBMB, shall follow the despatch instructions issued by SLDC.
12.3.3 Distribution licensees, Open Access Customers and Other Users shall comply with the instructions of SLDC for managing load & reactive power drawal as per system requirement.
[45]. As per Section 14.1.14 of the aforesaid Regulations, 2013, in the preparation of energy accounts, SLDC shall take into consideration the following aspects:-
o Agreements for supply and/or transmission of power, bilateral agreements, short term and spot purchases affected by any licensee and User;
o Policy guidelines or decisions of State Grid Code Review Committee;
o Decisions/directives of the Commission; o Components of tariff as approved by the Commission; and 23 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 24 o Such accounts by BBMB and NRPC.
[46]. As per Section 14.1.6 of the aforesaid Regulations, 2013, Monthly State Energy Accounts for Punjab shall be prepared by SLDC by 7th of every month and shall be conveyed to all concerned for raising bills. Such energy accounts shall be subject to inspection/verification/checking and raising any objection within 15 days of date of issue. If no objection is raised, energy accounts shall be finalized. In case, any objection is raised, same shall be deliberated in Commercial and Metering Committee and finalized as per their decision. Supplementary bills/credit note shall be raised accordingly.
[47]. Perusal of the aforesaid facts would show that State Load Dispatch Centre has definite obligations under the law and these obligations are independent and free from any overlapping obligations of any other person. State Load Dispatch Center has to act independently on defined parameters as laid down under Section 32 of the Electricity Act and under different Sections of Punjab State Electricity Commission (Punjab State Grid Code) Regulations, 2013. [48]. As per Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2004, "Availability" in relation to a thermal generating station for any period means the average of the daily average Declared Capacities 24 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 25 (DCs) for all the days during that period expressed as a percentage of the installed capacity of the generating station minus normative auxiliary consumption in MW and shall be computed in accordance with a specific formula. [49]. Declared Capacity means the capability of the generating station to deliver ex-bus electricity in MW declared by such generating station in relation to any period of the day or whole of the day, duly taking into account the availability of fuel.
[50]. Scheduled Generation at any time or for any period or time block means schedule of generation in MW ex-bus given by the Regional Load Despatch Centre. [51]. Regulation 15 of the aforesaid Regulations of 2004 deals with components of tariff. Section 15 of Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2004 is reproduced hereasunder:-
"15. Components of Tariff: (1) Tariff for sale of electricity from a thermal power generating station shall comprise of two parts, namely, the recovery of annual capacity (fixed) charges and energy (variable) charges. (2) The annual capacity (fixed) charges shall consist of:
(a) Interest on loan capital;
(b) Depreciation, including Advance Against Depreciation;
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(c) Return on equity;
(d) Operation and maintenance expenses; and
(e) Interest on working capital.
(3) The energy (variable) charges shall cover fuel cost." [52]. Regulation 16 of the aforesaid Regulations, 2004 deals with the norms of operation, which are dependent upon target availability for recovery of full capacity (fixed) charges, target plant load factor for incentive, gross station heat rate, secondary fuel oil consumption, auxiliary energy consumption and stabilization period.
[53]. Scheduling as given in Regulation 27 of the aforesaid Regulations, 2004 if read in conjunction with Indian Electricity Grid Code, then it would give following methodology of scheduling and calculating availability:-
(i) The generator shall make an advance declaration of capability of its generating station. The declaration shall be for that capability which can be actually made available.
The declaration shall be for the capability of the generating station to deliver ex-bus MW for the next day either as one figure for the whole day or as different figures for different periods of the day. The capability as declared by the generator, also referred to as the declared capacity, shall form the basis of generation scheduling.
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(ii) While making or revising its declaration of capability, the generator shall ensure that the declared capability during peak hours is not less than that during other hours. However, exception to this rule shall be allowed in case of tripping/re-synchronization of units as a result of forced outage of units.
(iii) Generation scheduling shall be done in accordance with the operating procedure stipulated in the Indian Electricity Grid Code.
(iv) Based on the declaration of the generator, the Regional Load Dispatch Centre shall communicate their shares to the beneficiaries out of which they shall give their requisitions.
(v) Based on the requisitions given by the beneficiaries and taking into account technical limitations on varying the generation and also taking into account transmission system constraints, if any, the Regional Load Dispatch Centre shall prepare the economically optimal generation schedules and drawl schedules and communicate the same to the generator and the beneficiaries.
The Regional Load Dispatch Centre shall also formulate the procedure for meeting contingencies both in the long run and in the short run (Daily scheduling).
(vi) The scheduled generation and actual generation shall be ex-bus at the generating station. For beneficiaries, the scheduled and actual net drawals shall be at their respective receiving points.
(vii) For calculating the net drawals schedules of beneficiaries, the transmission losses shall be 27 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 28 apportioned in their drawals schedules for the time being.
Provided that a refinement may be specified by the Commission in future depending on the preparedness of the respective Regional Load Dispatch Centre.
(viii) In case of forced outage of a unit, the Regional Load Dispatch Centre shall revise the schedules on the basis of revised declared capability. The revised declared capability and the revised schedules shall become effective from the 4th time block, counting the time block in which the revision is advised by the generator to be the first one.
(ix) In the event of bottleneck in evacuation of power due to any constraint, outage, failure or limitation in the transmission system, associated switchyard and sub- stations owned by the Central Transmission Utility or any other transmission licensee involved in inter-state transmission (as certified by the Regional Load Dispatch Centre) necessitating reduction in generation, the Regional Load Dispatch Centre shall revise the schedules which shall become effective from the 4th time block, counting the time block in which the bottleneck in evacuation of power has taken place to be the first one. Also, during the first, second and third time blocks of such an event, the scheduled generation of the generating station shall be deemed to have been revised to be equal to actual generation, and the scheduled drawals of the beneficiaries shall be deemed to have been revised to be equal to their actual drawals.
(x) In case of any grid disturbance, scheduled generation of all the generating stations and schedules 28 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 29 drawal of all the beneficiaries shall be deemed to have been revised to be equal to their actual generation/drawal for all the time blocks affected by the grid disturbance. Certification of gird disturbance and its duration shall be done by the Regional Load Dispatch Centre.
(xi) Revision of declared capability by the generator(s) and requisition by beneficiary(ies) for the remaining period of the day shall also be permitted with advance notice. Revised schedules/declared capability in such cases shall become effective from the 6th time block, counting the time block in which the request for revision has been received in the Regional Load Dispatch Centre to be the first one.
(xii) If, at any point of time, the Regional Load Dispatch Centre observes that there is need for revision of the schedules in the interest of better system operation, it may do so on its own, and in such cases, the revised schedules shall become effective from the 4th time block, counting the time block in which the revised schedule is issued by the Regional Load Dispatch Centre to be the first one.
(xiii) Generation schedules and drawal schedules issued/revised by the Regional Load Dispatch Centre shall become effective from designated time block irrespective of communication success.
(xiv) For any revision of scheduled generation, including post facto deemed revision, there shall be a corresponding revision of scheduled drawals of the beneficiaries.
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(xv) A procedure for recording the communication regarding changes to schedules duly taking into account the time factor shall be evolved by the Central Transmission Utility.
[54]. Regulation 28 of the aforesaid Regulations, 2004 deals with demonstration of declared capability. The generating company may be required to demonstrate the declared capability of its generating station as and when asked by the Regional Load Despatch Centre of the region in which the generating station is situated. [55]. Regulation 30 of the aforesaid Regulations, 2004 deals with billing and payment of capacity charges. Billing and payment of capacity charges shall be done on monthly basis. Each beneficiary shall pay the capacity charges in proportion to its percentage share in installed capacity of the generating station. Beneficiaries shall have full freedom for negotiating any transaction for utilization of their capacity shares. In such cases, the beneficiary having allocation in the capacity of the generating station shall be liable for full payment of capacity charges and energy charges corresponding to its total allocation and schedule respectively. If any capacity remains un-requisitioned during day-to-day operation, the Regional Load Despatch Centre shall advise all beneficiaries in the region and the other Regional Load Despatch Centres so that such capacity may be requisitioned through bilateral 30 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 31 arrangements either with the concerned generating company or with the concerned beneficiaries under intimation to the Regional Load Despatch Centre. The capacity charges shall be paid to the beneficiaries including those outside the region to the generating company every month in accordance with the prescribed formulas.
[56]. Perusal of the aforesaid provisions would show that State Load Dispatch Centre has definite obligations at different stages and capacity charges are independent of actual energy consumed by the beneficiary. [57]. State Load Dispatch Centre is supposed to function as an independent body under the Electricity Act 2003 and as per different regulations as discussed in the preceding paras. Power purchase agreement between the parties in its very nature cannot be held to be purely a contract giving civil consequence and pure contractual dispute. [58]. In the facts and circumstances of the present case, primary dispute revolves around inaction on behalf of Punjab State Load Dispatch Centre in not performing its part of obligation in terms of schedule and other obligations. There is no dispute as such against PSPCL so far as statutory obligations on the part of Punjab State Load Dispatch Centre are concerned. In order to maintain the writ petition, the Court has to consider the nature of agreement as to whether the 31 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 32 same is in relation to personal interest of the party or the corporation being instrumentality of the State as entered into such agreement in public interest. The Ministry of Power, Government of India issued guidelines for procurement of power through competitive bidding under Section 63 of the Electricity Act, 2003. Section 63 of the Act provides notwithstanding anything contained in Section 62 of the Act, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. The Central Government has issued guidelines for determination of tariff by bidding process for procurement of power by distribution licensees. The aforesaid guidelines have provided in detail about the procedure for invitation of the bid, the tariff structure, capacity charges, energy charges, the bidding process, bid submission and evaluation and award of contract in conclusion. Power purchase agreement should be in consonance with Section 63 of the Act and tariff has to be determined through transparent process of bidding in accordance with the guidelines. Therefore, it can be safely concluded that the entire process is guided and controlled by the guidelines framed by the Central Government and the contract entered into between the licensor and the licensee is more akin to a standard form of contract which has to pass the test laid down under Section 63 of the Electricity Act. The 32 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 33 contract in question is strictly based on the guidelines issued by the Central Government and no party can deviate from the said guidelines unless such deviation is approved by the appropriate Commission. The power purchase agreements entered into between the petitioners and PSPCL cannot be said to be a purely private contracts. Even the enormity of the project and the cost involved in building a power plant would have a public character element, looking into the fact that the contract was for supply of very high power/energy and that would be a project in public interest.
[59]. In view of aforesaid position, power purchase agreement is an agreement of such nature, which would have a public interest element, which is controlled and guided by relevant statutory provisions and dispute pertaining to the interpretation or otherwise of such a contract, would be amenable to the writ jurisdiction of the High Court. Reference can be made to Reliance Power Ltd. Vs. State of UP, 2019 SCC Online All 4845.
[60]. In view of ratio laid down in M/s Hindustan Sugar Mills Vs. State of Rajasthan and others, 1981 AIR (SC) 1681, Sanjeev Kumar Dwivedi Vs. State of Bihar and others, 2006(7) RCR (Civil) 765 and ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others, 2004 (3) SCC 553, the instrumentality 33 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 34 of State has to act for the public good. Any action contrary to the public good and interest unfairly and unreasonably, would violate constitutional guarantee under Article 14 of the Constitution of India. Services rendered by the petitioners are not gratuitous in nature, rather the work done by the petitioners is for public good. In such cases, even claim arising out of contractual obligations would be amenable to the writ jurisdiction of the High Court. The existence of purported alternative remedy under the statue does not oust the jurisdiction of the High Court under Article 226 of the Constitution of India in view of ratio laid down in Balkrishna Ram Vs. Union of India, 2020(2) SCC 442.
[61]. The impugned actions on behalf of PSPCL and SLDC are blatant defiance of the order passed by the Ministry of Power on 06.04.2020, directing all the distributing companies to ensure that the obligation to pay for the capacity charges as per power purchase agreement shall continue. Despite the expressed direction given by the Ministry of Power, the respondents have not acted in accordance with law due to mala fides and arbitrariness and the impugned actions are violative of Articles 14, 19 and 21 of the Constitution of India.
[62]. The present writ petitions deal with the questions of enforcement under the Disaster Management Act, 2005 and 34 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 35 such reliefs are not capable of being adjudicated by the Punjab State Electricity Regulatory Commission. The facts are not in dispute. There is no dispute as such with PSPCL. The dispute is only in respect of inaction on behalf of Punjab State Load Dispatch Centre, who has not done its legal obligation under the Act. The aforesaid authority is not even privy to power purchase agreement, therefore, the redressal of any such dispute before Punjab State Electricity Regulatory Commission cannot be effectively done. PSPCL and SDLC are independent statutory bodies under the Electricity Act and are supposed to function independently as per defined parameters laid down in Electricity Act as well as in Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013. PSPCL and SLDC have discriminated the petitioners while not treating them alike with other companies like NTPC etc., who are similarly situated and have been granted necessary reliefs. Even in those cases also, force majeure under the power purchase agreement was invoked.
[63]. Under the Electricity Act, Punjab State Load Dispatch Centre is legally bound to record the declared capacity/capacity charges of the petitioners. The relief involves in the present writ petition is against the Punjab State Load Dispatch Centre to record the petitioners declared 35 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 36 capacity for the relevant period, during which force majeure was declared/invoked.
[64]. In view of aforesaid, the writ petitions is maintainable. The objection with regard to earlier litigation in respect of penalty imposed upon Talwandi Sabo Power Limited and redressal thereof in the Appropriate Forum i.e. Punjab State Electricity Regulatory Commission has to be simply noted for the sake of information only. In that case, there was no force majeure event. The litigation was in respect of deduction of amount by the Corporation towards penalty in the bill of the year 2017. CWP No.10553 of 2017 titled Talwandi Sabo Power Limited Vs. State Grid Code Review Committee and others was decided as per consensus and the matter was relegated to the Punjab State Electricity Regulatory Commission.
[65]. In the instant case, there is no such consensus arrived at between the parties for relegation before Punjab State Electricity Regulatory Commission under Section 86 of the Electricity Act, 2003 read with Article 17 of the Power Purchase Agreement. The present dispute is purely rested upon statutory role of Punjab State Load Dispatch Centre, therefore, the petitioners can maintain the present writ petitions.
36 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 37 [66]. So far as the objection with regard to alternative remedy under Section 8 of the Arbitration and Conciliation Act, 1996 is concerned, the same is unsustainable as it is a settled law that presence of an arbitration clause in an agreement, cannot oust the jurisdiction of the Writ Court in view of ratio laid down in Harbans Lal Sahni Vs. Indian Oil Corporation, (2003) 2 SCC 107 and Ramjee Power Construction Vs. Union of India, 2006(86) DRJ 304. [67]. Admittedly, there is no arbitration clause between the petitioners and Punjab State Load Dispatch Centre. Even the Hon'ble Apex Court in ABL International Limited and another case (supra) has held that a writ petition involving a consequential claim of monetary relief is also maintainable. [68]. The impugned actions on behalf of Punjab State Load Dispatch Centre are contrary to the decision dated 06.04.2020 passed by the Ministry of Power, wherein it has been expressly stated that notwithstanding the lockdown, the obligation to pay for capacity charges as per power purchase agreement shall continue. Despite the aforesaid decision, PSPCL has not withdrawn impugned notices and SLDC has not acted in terms of defined duties arising out of Electricity Act, 2003 and Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013.
37 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 38 The orders passed by the Ministry of Power have the force of law and are binding in nature.
[69]. As per Article 7 of the Power Purchase Agreement, parties to the agreement shall comply with the provisions of applicable law, which includes the orders passed by the Ministry of Power in the given context. Inaction on behalf of Punjab State Load Dispatch Centre is in blatant disregard to the order dated 06.04.2020 passed by the Ministry of Power and the aforesaid order has stated in the notice dated 14.04.2020 that the said order relates to stoppage of payment by DISCOMs against scheduled power. However, the order of Ministry of Power dated 06.04.2020 categorically stated that the obligation to pay capacity charges as per power purchase agreement shall continue. Similar contentions were made by other State DISCOMs which have been rejected in the following cases:-
(i) Jhabua Power Ltd. Vs. MP Power Management Co.
Ltd, order dated 18.11.2021 in Petition No.10 of 2021 [MPERC]-No further appeal was filed to APTEL.
(ii) GGMR Warora Energy Ltd. Vs. DNH Power Distribution Co. Ltd., order dated 20.01.2022 in Petition No.594/MP/2020 [CERC].
38 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 39 [70]. The impugned actions on behalf of PSPCL and PSLDC are contrary to the guidelines issued by the Ministry of Home Affairs under the Disaster Management Act, 2005. Section 72 of the Disaster Management Act overrides any other law for the time being in force. On the one hand, the petitioners were directed to remain available to generate power under Disaster Management Act, 2005 (and expose itself to criminal prosecution for violation), whereas on the other hand, PSPCL has invoked force majeure and denying the lawful claims of the petitioners while complying with the provisions of Disaster Management Act, 2005 and guidelines issued by the competent authority. The impugned actions have no rational basis or intelligible differentia for such discrimination, in which the petitioners have been chosen, whereas others have been granted similar reliefs despite invoking force majeure by PSPCL. Punjab State Power Corporation Limited has not been accepting the declared capacity of the petitioners and in case of Nabha Power Limited, the same cannot be declared to be zero. Even insufficiency of finances or funds or the agreement becoming onerous to perform is covered under force majeure exclusions in terms of Article 12.4 of the Power Purchase Agreement. PSLDC has not accepted the declared capacity of the petitioners and the National Regional Load Dispatch Centre has accepted the declared capacity of the similarly placed 39 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 40 powers generating companies even though force majeure notices were issued to such companies as well. [71]. It can be noticed that impugned notices are contrary to the terms of the Power Purchase Agreement inasmuch as that PSPCL has invoked force majeure on the ground of "impact on cash flows" and "financial constraints". If the aforesaid assertion is tested at the threshold of Article 12.4 of the Power Purchase Agreement, where any "insufficiency of finances or funds or the agreement becoming onerous to perform" is expressly excluded as a force majeure event. The reduction in load/demand in the State of Punjab due to imposition of lockdown, does not fall under the ambit of force majeure as the same does not affect performance of PSPCL for fulfilling the obligations arising out of Power Purchase Agreement. The same grounds were highlighted by other State DISCOMs, which have been rejected in Jhabua Power Ltd. case (supra) and GMR Warora Energy Ltd case (supra). In the event of agreement becoming onerous to perform, it does not qualify as an event of force majeure and there has to be a legal or physical impossibility in procuring power from the petitioners in view of ratio laid down in Energy Watchdog Vs. CERC, (2017) 14 SCC 80. Capacity charges are unfettered even in the event of invocation of force majeure.
40 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 41 [72]. In DNH Power Vs. NTPC, 2018 SCC Online CERC 100, it was held that if the notice of invocation of force majeure is bad in law or not in consonance with Power Purchase Agreement, then the capacity charges must be payable. Capacity charges are different under the Grid Code itself. Capacity charges are dependent upon many factors, which will contribute in order to establish capacity. The actual consumption thereof is something different for which the energy has to be assessed towards monetary consideration. [73]. In case of Talwandi Sabo Power Limited, issuance of multiple notices by PSPCL alleging force majeure is nothing but an attempt to improve its argument with regard to the alleged force majeure event. PSPCL vide its notice dated 14.04.2020, raised new grounds in an attempt to justify the invocation of the force majeure event, which were absent in the previous notice dated 29.03.2020. Such an attempt cannot be permitted as the same is an attempt diluting its earlier stance in view of ratio laid down in Mohinder Singh Gill and another Vs. The Chief Election Commissioner, New Delhi and others, (1978) 1 SCC 305 and State of Punjab Vs. Bandeep Singh, (2016) 1 SCC 724.
[74]. Evidently, as per Ministry of Home Affairs notice dated 24.03.2020, power generation, transmission and distribution units and services were exempted from the 41 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 42 lockdown. PSPCL issued the impugned notice dated 29.03.2020 in utter disregard to the aforesaid order dated 24.03.2020. The alleged drastic reduction in load/demand would not constitute a force majeure event under the Power Purchase Agreement. PSPCL in other cases even after issuance of force majeure notices, has paid the capacity charges to the similarly situated generating companies by acknowledging the fact that the alleged drastic reduction in load/demand, does not constitute a force majeure event and that only lend credence to the fact that PSPCL and PSLDC have acted in wholly illegal and arbitrary manner. [75]. Capacity charges cannot be denied to the petitioners. The obligation to pay capacity charges is sacrosanct and the same cannot be repudiated even in the case of invocation of force majeure event by PSPCL. Capacity charges include various expenditures such as cost towards financial obligations of the project, salary of direct and indirect employees, consumables (excluding coal), operation and maintenance etc. [76]. Perusal of Articles 4.3 and 4.4 of the Power Purchase Agreement would show that even in case of non- scheduling of power declared available by the petitioners, PSPCL is liable to pay capacity charges. Article 4.3.1 of the Power Purchase Agreement would show that the Procurer 42 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 43 would pay the tariff for all of the available capacity upto the contracted capacity and scheduled energy of the power station according to its then existing contract capacity, throughout the term of this agreement. In terms of Article 4.3.2 of the Power Purchase Agreement, the Seller shall sell all the available capacity upto the contracted capacity of the power station to the Procurer pursuant to dispatch instructions, unless otherwise, instructed by the Procurer. Under Article 4.4.3 of the Power Purchase Agreement, if the Procurer does not avail of power upto the available capacity provided by the Seller and the provisions of Article 4.4.2 of the Power Purchase Agreement have been complied with (permission to the Seller to sell power being part of available capacity of the power station to third party), the Seller shall be entitled to sell such available capacity not procured, to any person without losing the right to receive the capacity charges from the Procurer for such un-availed available capacity. [77]. In the light of aforesaid contractual position, the petitioners have absolute right to claim capacity charges in terms of Articles 4.3 and 4.4 of the Power Purchase Agreements. Force Majeure in terms of Article 12 of the Power Purchase Agreements, does not envisage such provision for non-payment of capacity charges. The parties 43 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 44 cannot resile from their payment obligations on account of force majeure.
[78]. The action of PSLDC is found to be contrary to State Grid Code. Under Regulations 11.3.10, 11.3.12 and 11.3.13 of the Punjab Grid Code and Article 8.3 of the Power Purchase Agreements, the petitioners are duty bound to correctly declare their availability/declared capacity every day corresponding to their capabilities to generate electricity. PSLDC in turn, is duty bound to consider the declared capacity and prepare the SEA accordingly. PSLDC cannot deviate from its statutory obligations in this regard. [79]. Section 32 of the Electricity Act, 2003 has obligated Punjab State Load Dispatch Centre to discharge its statutory functions being responsible for optimum scheduling and dispatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State. Punjab State Load Dispatch Centre is an independent body and is not supposed to act on the instructions of PSPCL.
[80]. Regulation 14.1.6 of the Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013 specifies that Monthly State Energy Accounts for Punjab shall be prepared by SLDC by 7th of every month and shall be conveyed to all concerned for 44 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 45 raising bills. Such energy accounts shall be subject to inspection/verification/checking and raising any objection within 15 days of date of issue. If no objection is raised, energy accounts shall be finalized. In case, any objection is raised, same shall be deliberated in Commercial and Metering Committee and finalized as per their decision. Supplementary bills/credit note shall be raised accordingly. In the aforesaid Regulation, Commercial and Metering Committee (CMC) is the designated authority to deliberate upon the issue and decide the same in case, objection is raised within the prescribed time.
[81]. For the reasons recorded hereinabove, I am of the considered opinion that Punjab State Load Dispatch Centre has not performed its legal obligation as per mandate of the Electricity Act, 2003, Power Purchase Agreements and Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013. The inaction on behalf of Punjab State Load Dispatch Centre is liable to be deprecated. The impugned actions/notices are hereby quashed. However, Punjab State Load Dispatch Centre shall proceed to act in accordance with defined duties/obligations under the Electricity Act, 2003, Power Purchase Agreements and Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013 in the context of 45 of 46 ::: Downloaded on - 05-07-2022 03:19:35 ::: CWP Nos.7519 and 7715 of 2020(O&M) 46 scheduling the energy. In case of any objection in terms of Regulation 14.1.6 of the Punjab State Electricity Regulatory Commission (Punjab State Grid Code) Regulations, 2013, consequent action would follow.
[82]. With these observations, both the writ petitions are allowed. The issue is relegated to Punjab State Load Dispatch Centre for doing the needful in accordance with law.
(RAJ MOHAN SINGH)
JUDGE
04.07.2022
Prince
Whether reasoned/speaking Yes/No
Whether reportable Yes/No
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