Legal Document View

Unlock Advanced Research with PRISMAI

- Know your Kanoon - Doc Gen Hub - Counter Argument - Case Predict AI - Talk with IK Doc - ...
Upgrade to Premium
[Cites 4, Cited by 1]

Appellate Tribunal For Electricity

Tata Power Trading Company Limited vs 1. Maharashtra State Electricity ... on 3 July, 2013

                                                 Appeal No192 of 2012


             Appellate Tribunal for Electricity
                  (Appellate Jurisdiction)
                   APPEAL No.192 of 2012

Dated:03rd July, 2013
Present: HON'BLE MR. JUSTICE M KARPAGA VINAYAGAM, CHAIRPERSON
          HON'BLE MR. V J TALWAR, TECHNICAL MEMBER

In the Matter of:
Tata Power Trading Company Limited.,
Tata Power Mahalaxmi Receiving Station,
Bapat Marg, Lower Parel,
Mumbai-400 013

                                                      ...Appellant
                               Versus

1.   Maharashtra State Electricity Distribution Co. Ltd.,
     Prakashgad, 5th Floor,
     Bandra (East),
     Mumbai-400 051

2.   Maharashtra Electricity Regulatory Commission,
     World Trade Centre No.1,
     13th Floor, Cuffe Parade,
     Colaba, Mumbai-400 001


                                                ...... Respondent

Counsel for the Appellant(s)    : Mr. Anand K Ganesan
                                  Ms. Swapna Seshadri
                                  Ms. Swagatika Sahoo

Counsel for the Respondent(s): Ms. Madhavi Divan,
                               Mr. Ramni Taneja
                               Mr. Kiran Gandhi for R-1
                                  Mr.Buddy A Ranganadhan for R-2,
                                  Ms. Richa Bhardwaja for R-2
                                                             Page 1 of 66
                                                  Appeal No192 of 2012




                            J U D G M E NT

PER HON'BLE           MR.   JUSTICE   M.   KARPAGA     VINAYAGAM,
CHAIRPERSON

1. Tata Power Trading Company Limited is the Appellant
     herein.

2. The Appellant filed a Petition before the Maharashtra
     Electricity Commission(State Commission) claiming for the
     liquidated damages from the Maharashtra State Electricity
     Distribution Company Limited (MSEDCL) for the breach of
     contract by refusing to take delivery of electricity from the
     Appellant.

3.   The Maharashtra State Commission dismissed the said
     Petition by the impugned order dated 15.6.2012.

4. Aggrieved by the same, the Appellant has filed this Appeal.

5. The short facts leading to the filing of this Appeal are as
     follows:

          (a)     The Appellant is a Power Trading Company
          having its office at Mumbai. The Central Commission
          granted inter-state trading licence to the Appellant to
          undertake trading of electricity throughout the territory
          of India.


                                                             Page 2 of 66
                                               Appeal No192 of 2012


(b)     Maharashtra      State        Electricity    Distribution
Company Limited (MSEDCL), is the First Respondent.
It is a Distribution Licensee in the State of Maharashtra.
It    procures   electricity   from     various     sources      for
Distribution in the State of Maharashtra.

(c)     The Distribution Licensee (R-1) issued a tender
on 18.2.2010 for procurement of electricity through
competitive bidding by inviting bids from various
persons including Generators, Trading Licensees etc.,
for the supply of electricity in the month of June, 2010
for the quantum of 500 MW.

(d)     In response to the said tender, the Appellant on
8.3.2010 submitted its bid offering to supply electricity.

(e)     In the tender issued by the Distribution Licensee
on 18.2.2010, a specific condition was imposed to the
effect that the bidder shall identify the source of supply
of electricity and in case, the bidder decides to supply
electricity through some source other than the identified
source, then the bidder should obtain prior permission
of the Distribution Licensee for supply of electricity from
such other source. However, the Appellant in the bid
offer dated 8.3.2010 suggested a different condition in
the foot note to Annexure that the Appellant shall have
the option to supply electricity from an alternate source

                                                          Page 3 of 66
                                         Appeal No192 of 2012


provided that the landed cost of the electricity supply to
the Distribution Licensee was the same.

(f)   The Appellant in the bid offer specified the
sources also from whom the power will be procured
and supplied to the Distribution Licensee (R-1) and also
the delivery points.

(g)   The offer bid submitted on 8.3.2011, by the
Appellant also provided for the "Take or Pay"
compensation to be paid by the party in case of default
by the other party.

(h)   After receipt of the said bid, certain clarifications
were sought for by the Distribution Licensee (R-1) from
the Appellant. Accordingly, the same were furnished
by the Appellant. Thereafter, by communication dated
22.3.2010, the Distribution Licensee (R-1) accepted the
bid offer of the Appellant and issued the Letter of Intent
for procurement of 99 MW electricity from the Appellant
which included 15 MW from CPP in West Bengal and
24 MW from CPP in Karnataka being the identified
source.

(i)   The Letter of Intent dated 22.3.2010, also
provided that in case a separate Power Purchase
Agreement was not signed between the parties, the
terms and conditions as provided in the Letter of Intent
                                                    Page 4 of 66
                                       Appeal No192 of 2012


dated 22.3.2010, including the liquidated damage
clause would apply.

(j)    The Appellant and the Distribution Licensee did
not enter into a separate Power Purchase Agreement
and as such the terms and conditions provided in the
Letter of Intent became effective agreement between
the parties.

(k)    The Appellant sent a letter to the Distribution
Licensee (R-1) on 24.5.2010 informing it regarding the
change of source of supply by which the Appellant
offered to supply 39 MW of electricity from an alternate
source namely from Gujarat Urja Vikas Nigam Limited
for the entire month of June, 2010 by specifically
mentioning that the expected landed cost from the
alternate source would not be more than the expected
landed cost for the power from sources identified
earlier.

(l)    The Distribution Licensee (R-1) sent a reply on
31.5.2010 to the Appellant that it did not wish to avail
power from the alternate source as offered and that the
Letter of Intent shall remain amended to that extent. In
the meantime, the Appellant made an application for
Open Access on 26.5.2010.         On this Application,
permission was said to be granted by the Western

                                                  Page 5 of 66
                                              Appeal No192 of 2012


Regional   Load       Despatch      Centre     and     by      the
Maharashtra     State    Load       Despatch      Centre        for
transmission of electricity from Gujarat Urja Vikas
Nigam Limited., the seller of the electricity to the
Distribution Licensee.

(m)   In view of the breach of the terms by refusing to
receive the supply, the Appellant by the communication
dated 19.7.2010, sent a notice to the Distribution
Licensee      (R-1)      claiming      compensation              of
Rs.2,03,48,000/- (Two Crore Three Lacs and Forty
Eight Thousand) for the failure of the Distribution
Licensee (R-1) to off take the electricity from the
Appellant as per the agreement between the parties.

(n)   Denying this claim, the Distribution Licensee (R-
1) sent a reply on 28.7.2010 informing the Appellant
that Distribution licensee was not liable to pay the
compensation since the Appellant had not taken prior
permission for supply of power through the alternate
source before making such arrangements.

(o)   Under    those     circumstances,        the    Appellant
approached the State Commission on 6.12.2010 and
filed a Petition in case No.91/2010 praying for
adjudication and payment of compensation from the



                                                         Page 6 of 66
                                               Appeal No192 of 2012


        Distribution Licensee in terms of the agreement
        between the parties.

       (p)    The State Commission after hearing the parties,
        dismissed the Petition by the impugned order dated
        15.6.2012, holding that the Appellant is not entitled to
        get the liquidated damages.

       (q)    The Appellant, being aggrieved by this impugned
        order, has filed this Appeal.

6. The learned Counsel for the Appellant has assailed the
   impugned order on the following grounds:

       (a)    The contract between the parties i.e. Appellant
        and the Distribution Licensee was reached in terms of
        the bid offer submitted by the Appellant and the Letter
        of Intent issued by the Distribution Licensee (R-1)
        accepting such a bid. According to the terms of Letter
        of Intent, in case a separate Power Purchase
        Agreement was not signed between the parties, the
        terms and conditions as provided in the Letter of Intent
        shall apply to both the parties.   Thus, the Letter of
        Intent would prevail over any other document relating to
        the transactions.      As such, the State Commission
        should not have relied upon the tender document
        wherein it was stipulated that prior permission of the


                                                          Page 7 of 66
                                        Appeal No192 of 2012


Distribution   Licensee    was   required   for   sourcing
electricity from alternate source.

(b)   The offer bid submitted by the Appellant and the
Letter of Intent issued by the Distribution Licensee
clearly provided that it was open to the Appellant to get
the electricity from the alternate source provided that
the landed cost at MSEDCL of the electricity supplied
to the Distribution Licensee from the alternate source
remains the same. Therefore, it was not open to the
State Commission to rely upon the tender document
stipulating the prior permission of the Distribution
Licensee and the condition mentioned in the Letter of
Intent dated 22.3.2010 that the Appellant will have the
option to supply from an alternate source at the same
landed cost, would alone prevail.

(c)   The State Commission has gone wrong in relying
upon Clause 11 of the Tender Document for obtaining
prior permission of the Distribution Licensee to supply
electricity through an alternate source. The provisions
of the Tender Document are not applicable to the
present case since the Distribution Licensee in its
Letter of Intent expressly accepted the stipulation made
by the Appellant in its bid that the Appellant would have
the option of supplying power from an alternate source
at the same landed cost.
                                                   Page 8 of 66
                                       Appeal No192 of 2012


(d)   The State Commission was only concerned with
the supply of electricity by the Appellant and the
contracted price for which the electricity is to be
supplied to the Distribution Licensee. So long as the
Appellant is supplying the agreed quantum at the
agreed price to the Distribution Licensee, there can be
no legal objection whatsoever to the source of supply.

(e)   The State Commission has given a wrong finding
that no Open Access was granted to the Appellant for
supply of electricity to the Distribution Licensee from
Gujarat Urja Vikas Nigam Limited. In fact, the Open
Access was obtained by the Appellant for sourcing
electricity from Gujarat Urja Vikas Nigam Limited and
on the basis of the said Open Access, the Appellant
actually supplied some quantum of electricity from
Gujarat Urja Vikas Nigam Limited to the third party to
mitigate the loss during the month of June, 2010.
Despite   the   above   factual   position,   the     State
Commission erred in coming to the conclusion that no
Open Access was granted.

(f)   The State Commission failed to appreciate the
inconsistent stand taken by the Distribution Licensee.
The original stand taken by the Distribution Licensee
was that there was no restriction whatsoever on the
Appellant to source the electricity from a different
                                                    Page 9 of 66
                                                Appeal No192 of 2012


        source and that only the proof of failure of the
        generator i.e. identified source, was not made available
        to the Distribution Licensee. However, the Distribution
        Licensee subsequently changed its stand by pleading
        that prior permission of the Distribution Licensee was
        required for sourcing electricity from alternate source.
        Therefore, the State Commission failed to take note of
        this while passing the impugned order.

7. Elaborating these grounds, the learned Counsel for the
   Appellant has advanced detailed arguments and prayed for
   setting aside the impugned order and for consequential
   directions to the Distribution Licensee for payment of
   liquidated damages.

8. The learned Counsel for the Distribution Licensee (R-1)
   would make the following reply:

       (a)    Both the tender conditions as well as the Letter of
        Intent conditions require the grounds to be established
        for a change of source of power. The tender condition
        permitted a change of source of power only when the
        corridor is not available. Only in that case, the bidder
        could approach the Distribution Licensee and obtain
        prior permission for change of source. This clause was
        unequivocally accepted by the Appellant as it was not
        mentioned in the deviation schedule attached with the

                                                          Page 10 of 66
                                       Appeal No192 of 2012


Letter of    Offer dated 8.3.2010 submitted by the
Appellant.

(b)   The Letter of Intent conditions requires that the
Appellant has to make out a case of failure of the
Generator at the source of supply.     Any revision of
schedule requires the mutual consent of the parties.
This condition has not been complied with by the
Appellant.

(c)   Even assuming that the Letter of Conditions
alone should be relied upon and not the conditions in
the tender notice, the Appellant failed to make out a
case of failure of the generator at the source of supply
as per the conditions of Letter of Indent. In fact, no
mention of alleged failure to get supply from the
identified source was made in the Letter dated
24.5.2010 sent by the Appellant while informing the
arrangements for alternative source to the Distribution
Licensee. Even though there was a slight reference
made in the subsequent letter dated 19.7.2010 sent to
the Distribution Licensee about the alleged failure of
the Generator at the source of supply, no other
materials were produced before the State Commission
to establish the same.



                                                 Page 11 of 66
                                                 Appeal No192 of 2012


         (d)   The main prayer claiming the liquidated damages
         was on the basis that Open Access approval was
         obtained from the authorities. The factual finding of the
         State Commission in the impugned order was that no
         such Open Access approval was obtained by the
         Appellant as no proof was produced to establish the
         same before the State Commission.        Therefore, this
         finding cannot be said to be wrong.

         (e)   In the absence of the grant of Open Access
         approved no claim for liquidated damages could be
         made under Clause 4(a) of the Letter of Intent.

9. On the basis of this reply, the learned Counsel for the
    Distribution Licensee (R-1) prayed for the dismissal of this
    Appeal.

10. In the light of the above submissions, the following questions
    would arise for consideration:

         (a)   Whether the State Commission was justified in
         relying upon Clause 11 (V) and (VII) of the Tender
         Document, while Clause 3 (c) of the Letter of Intent
         provides that prior permission is not required in the
         event of supply of power from alternate source at the
         same landed cost ?




                                                           Page 12 of 66
                                                 Appeal No192 of 2012


         (b)   Whether the State Commission was correct in
         giving the finding that it was not established that there
         was a failure of the Generator at the source of supply.

         (c)   Whether the State Commission was right in
         rejecting the claim of the Appellant for compensation
         under Clause 4 (a) of the Letter of Intent on the ground
         that Open Access was not granted to the Appellant
         when it is claimed by the Appellant that Open Access in
         fact had been granted?

11. Before dealing with this question let us now refer to the crux
    of the findings rendered by the State Commission in the
    impugned order:

         (a)   The bid document i.e. tender document dated
         18.2.2010 issued by the Distribution Licensee would
         provide that in case, the corridor is not available from
         the identified source and the bidder decides to supply
         electricity through the alternate source, then the bidder
         should obtain prior permission of the Distribution
         Licensee. Responding to the tender notice, the Tata
         Company in the Petition sent the offer on 8.3.2010 in
         accepting the said conditions.     No deviation in this
         respect was sought for by the Petitioner through its bid
         documents.    So, the bid document dated 18.2.2010,
         which was an invitation to make an offer was accepted

                                                           Page 13 of 66
                                         Appeal No192 of 2012


by the Petitioner, Tata Power Company in submitting
their bid documents dated 8.3.2010 giving the offer.
This was accepted by the Distribution Licensee by
issuing Letter of Intent dated 22.3.2010. The Terms
and Conditions in the Bid Document and Letter of
Intent, in the absence of formal PPA, shall be binding
on the parties.

(b)    Therefore, the conjoint reading of all these
conditions mentioned in all these three documents
namely tender document, bid offer and Letter of Intent
would indicate that prior permission of the Distribution
Licensee should be taken in the event Petitioner
decided to supply power from alternate source due to
non availability of the corridor from the identified
source. According to Petitioner, the Corridor was not
available from the identified source and therefore, the
Petitioner offered to supply to the Distribution Licensee
through the alternate source. If it is so, the Petitioner
as per the conditions in the tender document, should
have obtained prior permission of the Distribution
Licensee.     Admittedly, this was not obtained by the
Petitioner.

(c)   It is true that in the Letter of Intent, there was no
condition that prior permission for procurement of
power from alternate source requires to be obtained
                                                   Page 14 of 66
                                          Appeal No192 of 2012


from the Distribution Licensee.      But, in the Letter of
Intent     dated 22.3.2010 issued by the Distribution
Licensee required the Tata Power Company to book
the corridor after the receipt of the consent from the
Distribution Licensee.

(d)      The reading of the Letter of Intent in entirety
would indicate that prior to the application filed by the
Tata Power Company to the State Load Despatch
Centre for obtaining Open Access in order to get the
power from alternate source namely Gujarat Urja Vikas
Nigam Limited, the Petitioner has to obtain the prior
permission from the Distribution Licensee since it is the
implied condition mentioned in the Letter of Intent.
Further scheduling as referred to in the Letter of Intent
was not a blanket right given to the Petitioner to secure
power from any other source.         As such, the Tata's
leeway to procure power from alternate source was not
unbridled right.

(e)      On the other hand, the Petitioner has to establish
the aspect of the failure of the Generator i.e. identified
source at the source of supply and consequently the
corridor was not available. This aspect has not been
proved. The Petitioner was duty bound to explain to
the Distribution Licensee about the reasons as to why
no corridor was available from the identified sources
                                                    Page 15 of 66
                                                  Appeal No192 of 2012


        namely West Bengal and Karnataka and to seek
        consent for scheduling of power from alternate source.
        In the absence of the proof for the same, the Petitioner
        is not entitled to claim compensation.

        (f)   From the documents submitted by the Petitioner,
        it is noticed that the application dated 26.5.2010 was
        made by Petitioner to the Load Despatch Centre to
        seek Open Access approval.           But, there was no
        material to show that the Open Access was granted by
        the Load Despatch Centre and consent letter was
        obtained from the Distribution Licensee prior to the
        filing of said application. Thus, it is clear that no Open
        Access was granted to the Petitioner.

        (g)    The condition of Letter of Intent provides that
        the Distribution Licensee shall be liable to pay
        compensation     to   the   Petitioner   only   when       the
        Distribution Licensee fails to avail 80% of the approved
        Open Access capacity supplied by the Petitioner. In
        this case, the question of the distribution licensee
        compensating the Tata Power Company would not
        arise since Open Access mentioning the Capacity was
        not obtained.

12. Bearing the above findings in mind, we shall now analyse
   the questions framed above one by one.

                                                            Page 16 of 66
                                                    Appeal No192 of 2012


13. Let us deal with the first issue relating to the prior
    permission to be obtained from the Distribution
    Licensee for supply of electricity from alternate source.

14. In an integrated electrical grid, the electricity follows the laws
    of physics i.e. it follows least impedance path and electricity
    generated is delivered to its beneficiary by way of
    displacement. In the present case, electricity generated by
    Generators in West Bengal and Karnataka would have been
    consumed in the Eastern or Southern Regions and
    Distribution Licensee (R-1) would have received electricity
    generated in Gujarat, MP or AP.            Under such factual
    situation the question arises as to what was the necessity of
    putting condition of prior permission of Distribution Licensee
    in the event of change of source as it was not expected to
    receive electricity from identified sources in the integrated
    system.

15. The answer to this question lies in clause related to open
    access charges in the offer of the Appellant as well as in
    Clause 2 of the LOI dated 22.3.2010. Both these clauses
    stipulate that the Open Access charges i.e. Transmission
    Charges, Operating Charges, Energy Losses etc beyond
    delivery point shall be borne by the Distribution Licensee
    (R-1).    The Appellant in its offer dated 8.3.2010 had
    indicated delivery point as interconnection point between
    CPP and DTL in West Bengal and interconnection point
                                                              Page 17 of 66
                                                  Appeal No192 of 2012


    between CPP and KPTCL in Karnataka.                 Thus, the
    Distribution Licensee was required to bear all the Open
    Access charges beyond these delivery points and, therefore,
    required to know any change in source of supply because it
    would involve change in corridor and consequently Open
    Access charges including Transmission losses.

16. On this issue, the case of the Appellant is as follows:

         "As per the applicable terms and conditions contained
         in the Letter of Intent, there is restriction on the
         Appellant to source the power from alternate source
         and supply the same to the Distribution Licensee only
         when the landed cost of the supply between the
         Distribution Licensee did not increase as a result of the
         change of source.     In this case, the landed cost was
         not more.     Therefore, refusal to avail power from
         alternate source by the Distribution Licensee was illegal
         in breach of the terms of the agreement.        The State
         Commission cannot hold that the tender notice dated
         18.2.2010 should form a part of the Agreement
         between the parties and then by implication, an
         additional condition should be read into agreement that
         the prior permission of the Distribution Licensee was
         required for the Appellant to supply electricity through
         the alternate source. Therefore, the conclusion by the
         State Commission on the basis of the Tender Notice
                                                              Page 18 of 66
                                                 Appeal No192 of 2012


        dated 18.2.2010 with regard to the prior permission is
        totally wrong."

17. Let us quote the said relevant findings of the State
   Commission in the impugned order:

         "b. Thereafter, no deviations were sought by TPTCL
         in its bid document dated 8th March 2010 in respect of
         the aforesaid terms and conditions in clause 11 as
         mentioned in the MSEDCL's Bid document, when it
         submitted the same to MSEDCL. So in effect it means
         that firstly MSEDCL's bid document dated 18th
         February 2010 was an invitation to make an offer,
         thereafter the action of TPTCL in submitting the
         bid document dated 8th March 2010 was an offer
         made by it, which was accepted by MSEDCL by
         the signing of an LOI dated 22nd March 2010. The
         Terms and conditions of the LOI mentioned that in
         absence of a formal PPA the said Terms and
         conditions shall be binding, so in effect TPTCL had
         submitted its offer after having regard to the aforesaid
         terms and conditions in the Initial Bid Document
         issued by MSEDCL for which no deviation were
         sought in the subsequent bid document (offer)
         submitted by it.

         Therefore the conjoint reading of all these indicate that
         the Bid Document contemplated that a prior
         permission of MSEDCL should be taken in the event
         TPTCL required to supply power from alternate source
         is owing to the non-availability of corridor".

18. According to the Appellant, the conditions provided in the
   Letter of Intent dated 22.3.2010 on the basis of the offer
   made by the Appellant on 8.3.2010 would prevail over the
   earlier tender notice dated 18.2.2010 issued by the
                                                           Page 19 of 66
                                                Appeal No192 of 2012


   Distribution Licensee but the State Commission has wrongly
   held in the impugned order that as per the Letter of Intent in
   the absence of any separate power Purchase Agreement,
   the terms and conditions mentioned in all the three
   documents including the Tender Notice, shall be applicable.

19. Let us refer to those conditions referred to and provided in
   all these three documents:

          1St Document is dated 18.2.2010: (Tender notice)
          Relevant Condition is as follows:
          "a. Initial Bid/Tender Document dated 18 February
          2010 was issued by MSEDCL provides inter alia as
          under:-
          Clause 11 Other Terms and Conditions
          (V) The bidder should preferably supply the quantum
          of power from one source(Generator)only. If the
          quantum of power is supplied from different sources,
          it should be indicated clearly".
          (VII) The bidder should book the corridor for the
          shortest route once the order is issued for supply of
          power. MSEDCL will not bear the extra Open Access
          charges due to change in corridor for power supply on
          Account of delay in obtaining Open Access approval.
          In case the corridor is not available and the Bidder
          desires to supply the contracted quantum of power
          through other source/corridor, then Bidder should
          obtain prior permission of MSEDCL. Even if Bidder
          supplies contracted quantum through source/corridor
          different from that referred to in order, then Bidder
          himself will be responsible for the charges over and
          above the agreed charges as per the order towards
                                                          Page 20 of 66
                                                Appeal No192 of 2012


         the change in rate, Open Access charges,
         Transmission loss and scheduling charges etc.,".
         (XV) After receipt of Letter of Award or Order for
         supply of power, the bidder should immediately book
         the corridor for contracted quantum for the period of
         supply and acknowledge the same, otherwise it will
         be treated as order is accepted and all terms and
         conditions of the order placed by MSEDCL and
         this tender shall be applicable."
         (XVI)     Daily schedule will be intimated 24 hrs in
         advance and any revision in Schedule shall be
         implemented only with mutual consent and the party
         seeking the revision shall lease the application fees,
         rescheduling charges etc.,"{Emphasis Supplied}.
20. The condition put in the tender notice referred to above,
   would reveal that the bidder should supply to the Distribution
   Licensee from the identified source and in case the Corridor
   is not available from the said source, then bidder should
   obtain prior permission of Distribution Licensee for supply
   through the alternate source. Further, in case the bidder
   failed to acknowledge the acceptance of offer it will be
   treated that the offer has been accepted and terms and
   conditions of the tender document and offer shall be
   applicable.

21. Now let us see the 2nd Document namely the offer of the
   Appellant dated 08.3.2010 given in the bid documents
   submitted by the Appellant.

     "This has reference to the Notice inviting Tender
    No.CE(PP)T-2/2010 for Purchase of power for 500 MW
                                                          Page 21 of 66
                                                  Appeal No192 of 2012


     RTC power on Firm Basis during 1st June 2010 to 30th June
     2010. We are pleased to submit herewith our power
     trading bid. We have carefully perused the above tender
     specifications and agree to abide by the same subject to
     the deviations indicated in the Deviation Schedule enclosed
     herewith."
22. According to the Appellant, when the offer dated 8.3.2010
    was made by the Appellant, the offer was made with a
    different clause in regard to change of source and supply
    from alternate source of supply. The offer of the Appellant
    was that the Appellant shall have the option to supply
    electricity from alternate source provided that the landed
    cost of the supply to the Distribution Licensee at the same
    landed cost. The said portion of the offer referred to is in the
    form of Note and Annexure A          in the document dated
    8.3.2010 and read as follows:

   "TPTCL shall have an option to supply from an alternate
   source at the same landed cost mentioned above."
23. It is to be noted that there is no landed cost mentioned in the
    Annexure-A and the Appellant had only indicated Rate ex-
    bus at delivery point in the Annexure to its offer dated
    08.3.2010. As pointed out in para-15 above, the landed cost
    to Distribution licensee would be sum of Rate of supply at
    delivery point and open access charges, etc, from the
    delivery point to MSETCL periphery. Thus, the landed cost
    could be determined after booking of corridor and cannot be
    finalised at the tender stage.
                                                            Page 22 of 66
                                                   Appeal No192 of 2012


24. According to the Appellant, there is a different provision in
    regard to change of source of supply in variation to the
    condition of the prior permission mentioned in the tender
    notice dated 18.2.2010. However, since it is in the form of
    Note in Annexure having no mention of landed cost in the
    offer, this provision is of no consequence.

25. The offer made by the Appellant in the above document also
    provided for "Take or Pay" compensation to be paid by
    either party in case of default by the other party. In case,
    the Appellant failed to supply minimum quantum of electricity
    to the Distribution Licensee, the Appellant was required to
    pay a specific compensation to the Distribution Licensee.
    Similarly, in case, the Distribution Licensee failed to off-take
    the specified quantum of electricity from the Appellant, the
    Distribution Licensee was required to pay the liquidated
    damages to the Appellant. The said offer of the Appellant in
    8.3.2010 reads as under:

          "Without prejudice to the provision of force Majeure, if
          TPTCL fails to supply 80% of the power as per Open
          Access granted by RLDC/SLDC, TPTCL shall pay a
          compensation @ Rs. 2.00 (Rupees Two) per Kwh to
          MSEDCL for the quantum of power that falls short of
          80% of the power as per Open Access granted by
          RLDC/SLDC on a monthly basis.
          On the other hand if MSEDCL fails to draw 80% of the
          power as per Open Access granted by RLDC/SLDC,
          MSEDCL shall pay compensation @ Rs. 2.00
          (Rupees Two) per Kwh to TPTCL for the quantum of
                                                             Page 23 of 66
                                                 Appeal No192 of 2012


          off take that fall short of 80% of power as per Open
          Access granted by RLDC/SLDC on a monthly basis."

26. Accepting this offer, the Distribution Licensee by the
   communication dated 22.3.2010, issued a Letter of Intent.
   As per the Letter of Intent, the total quantum of electricity to
   be procured by the Distribution Licensee from the Appellant
   was 99 MW which included 15 MW from West Bengal and
   24 MW from Karnataka.          It has also been specifically
   mentioned in the Letter of Intent that the detailed terms and
   conditions contained in the Letter of Intent are applicable in
   the absence of any separate agreement entered into
   between the parties.

27. Admittedly, the Appellant and the Distribution Licensee did
   not enter into any separate Agreement. Consequently, the
   terms and conditions provided for in the Letter of Intent
   dated 22.3.2010 were applicable including the compensation
   clause.

28. Letter of Intent dated 22.3.2010 provides as under:

          "3) Scheduling
          (b)Trader/Seller should schedule power as per
          consent given by MSEDCL/CE(LD) Kalwa. The power
          shall be scheduled informally as per the Open Access
          granted Revision of Schedule shall not be done
          without consent of MSEDCL/CE(LD) Kalwa.
          (c) In case of failure of the generator(s) at the source
          of supply, the Trader/Seller can make available the
                                                           Page 24 of 66
                                                 Appeal No192 of 2012


         agreed quantum of power as quoted above from
         any other alternate source(s) in such a way that
         the cost of power to MSEDCL at the MSETCL
         periphery shall be the same as the landed cost to
         MSEDCL at the MSETCL periphery at the rates
         quoted above. All other Terms and Conditions shall
         remain unchanged."
         (d) Revision of Schedule
         In case of revision of schedule, a consolidated request
         indicating the reason and mutual consent of both the
         parties for revision shall be submitted to
         WRLDC/SLDC.          The Application fee and the
         scheduling charges shall be paid by the Applicant but
         shall be borne by the party seeking the revision.

29. The liquidated damages was provided in the Letter of Intent
   in Clause 4 (a) which is as follows:

         "4) Compensation:
         a. Compensation payable by MSEDCL
              In case MSEDCL fails to avail 80% of approved
              Open Access capacity during above period from
              Trader/Seller,    then   MSEDCL      shall    pay
              compensation @ 2.00 per kwh for each unit that fall
              short of 80% of approved Open Access.

30. From the conjoint reading of these documents, following
   propositions would emerge:

        (a)     As per Clause 11 (xv) of the Tender document
        dated 18.2.2010 the terms and conditions specified in
        the tender document and Letter of Intent would be
        applicable to the transaction.
                                                           Page 25 of 66
                                         Appeal No192 of 2012


(b)   In terms of Clause 11 (vii) of the Tender
document, the Appellant was required to book the
shortest route immediately upon getting order of supply
of power.    In case corridor was not available and
Appellant   desired   to   supply   power    from      other
source/corridor, the Appellant was required to obtain
prior permission of the Distribution Licensee.

(c)   Thus, once the order for supply is placed on the
Appellant, the Appellant could change the source of
supply only on non-availability of corridor and with prior
permission of the Distribution Licensee.

(d)   Clause 3 of the Letter of Intent dated 22.3.2010
read with Clause 11 (viii) of the Tender Document
deals only with day head scheduling and has nothing to
do with change of source of supply ab-initio. It would
come into play only in case, the identified generator
fails to supply on a particular day or days. On such
occasions, the Appellant had option to supply power
from any other sources provided the landed cost to
Distribution Licensee remains the same.

(e)   The Appellant vide its offer dated 8.3.2010, had
accepted the terms and conditions of the Tender
Document subject to some deviations indicated in the
deviation schedule enclosed with the offer. Deviation

                                                    Page 26 of 66
                                                Appeal No192 of 2012


        Schedule did not indicate any change in clause 11 (vii)-
        requiring prior permission of Distribution Licensee for
        change of source. Accordingly, this Clause becomes
        binding on the Appellant.

        (f)    Annexure-A to the offer dated 8.3.2010 specified
        only the rate of power at Ex-bus at delivery point and
        not the landed cost. Note to Annexure mentions that
        the Appellant shall have an option from an alternate
        source at the same landed cost as mentioned
        above. However, there has not been any mention of
        the landed cost in the Annexure A.

        (g)    The offer dated 8.3.2010 made by the Appellant
        was subject to the confirmation by the Appellant after
        issuance of LoI by the Distribution Licensee.

        (h)    There is nothing on record to show that the
        Appellant had confirmed or accepted the LoI. Thus, the
        contract can be considered to be concluded contract
        only by virtue of clause 11(XV) of Tender Document.

31. It is clear from the above analysis that prior permission of
   the Distribution Licensee was required to be taken by the
   Appellant for effecting any change of source.

32. Reliance placed by the Appellant on Clause 3 (c) of the
   Letter of Intent dated 22.3.2010 is misplaced. Clause 3 of
   the Letter of Intent deals with scheduling and is not
                                                          Page 27 of 66
                                                 Appeal No192 of 2012


   applicable on change of source ab-initio.         It would be
   applicable only in case the identified generator fails on a
   particular day, due to any reason, to deliver scheduled
   power then the Appellant may supply power from any other
   source.

33. As brought in Para 15 above, the distribution licensee was
   liable to pay Open Access Charges including transmission
   charges and energy losses beyond delivery point and it had
   right to know any change in corridor resulting into change in
   its liability towards Open Access Charges.

34. To support its argument, the Appellant has quoted the
   judgment of Hon'ble Supreme Court in the case of DDA Vs
   Joint Action Committee of SFS Flats (2008) 2 SCC 672.

35. This authority has laid down the principle that once a valid
   contract has been entered into, one party cannot unilaterally
   change the terms of contract. The ratio of this judgment
   would not apply to the present case as Clause 11 (xv) of the
   Tender Document provides that Terms and Conditions in
   Tender Document along with Terms and Conditions
   specified in the Letter of Intent would be applicable. Clause
   11 (vii) provides for prior permission of the Distribution
   Licensee for any change of source due to non-availability of
   corridor. Thus, the Distribution Licensee has not changed
   any condition unilaterally.    The State Commission has

                                                           Page 28 of 66
                                                Appeal No192 of 2012


   correctly held that tender Document dated 18.2.2010 also
   forms part of the Agreement between the parties and as
   such the conditions specified in the Tender Document also
   should be read in to the Agreement.

36. The learned Counsel for the Appellant submitted that it is
   settled law that a contract during its subsistence is binding
   on the parties. It is not open to one party to unilaterally
   amend the terms of the contract. This settled proposition of
   law has been laid down by the Hon'ble Supreme Court in
   the case of Delhi Development Authority V Joint Action
   Committee, Allottee of SFS Flats, (2008) 2 SCC 672 which
   is as under:

         "62. It is well-known principle of law that a person
         would be bound by the terms of the contract subject of
         course to its validity. A contract in certain situations
         may also be avoided. With a view to make novation of
         a contract binding and in particular some of the terms
         and conditions thereof, the offeree must be made
         known thereabout. A party to the contract cannot at
         a later stage, while the contract was being
         performed, impose terms and conditions which
         were not part of the offer and which were based
         upon unilateral issuance of office orders, but not
         communicated to the other party to the contract
         and which were not even the subject-matter of a
         public notice. Apart from the fact that the parties
         rightly or wrongly proceeded on the basis that the
         demand by way of fifth instalment was a part of the
         original Scheme, DDA in its counter-affidavit either
         before the High Court or before us did not raise any
         contra plea. Submissions of Mr Jaitley in this behalf
                                                          Page 29 of 66
                                                 Appeal No192 of 2012


         could have been taken into consideration only if they
         were pleaded in the counter-affidavit filed by DDA
         before the High Court.
         ................................

66. The stand taken by DDA itself is that the relationship between the parties arises out of the contract. The terms and conditions therefor were, therefore, required to be complied with by both the parties. Terms and conditions of the contract can indisputably be altered or modified. They cannot, however, be done unilaterally unless there exists any provision either in contract itself or in law. Novation of contract in terms of Section 60 of the Contract Act must precede the contract- making process. The parties thereto must be ad idem so far as the terms and conditions are concerned. If DDA, a contracting party, intended to alter or modify the terms of contract, it was obligatory on its part to bring the same to the notice of the allottee. Having not done so, it, relying on or on the basis of the purported office orders which are not backed by any statute, new terms of contract could (sic not be) thrust upon the other party to the contract. The said purported policy is, therefore, not beyond the pale of judicial review. In fact, being in the realm of contract, it cannot be stated to be a policy decision as such."

37. According to the Appellant, so long as this condition of landed cost not being higher was fulfilled, there cannot be any other condition imposed upon the Appellant merely because the said condition was prescribed in the Tender Document. The offer dated 8.3.2010 and the letter of Intent dated 22.3.2010 accepting the said offer alone could be Page 30 of 66 Appeal No192 of 2012 considered to be an agreement. Once an agreement based on the offer and acceptance comes into force, the prior document including the tender notice issued by the Distribution Licensee have no relevance and no additional conditions can be read into the agreement based thereon. In order to substantiate this point, the learned Counsel for the Appellant has cited the judgment of Hon'ble Supreme Court reported in (2007) 13 SCC 236 Security Printing and Mining Corporation v. Gandhi Industrial Corporation as under:

"16. After hearing the counsel for the parties and perusing the record we are of the opinion that the view taken by the arbitrator and affirmed by the learned Single Judge and the Division Bench of the High Court cannot be sustained. Firstly, when the terms and conditions have been reduced (sic to writing) in the supply order dated 31-5-1995, therein the condition of MODVAT credit was incorporated and it was accepted by the claimant. The contract had come into existence and the supply had been started on the basis of that supply order. Though the claimant had protested with regard to this clause but the Appellant did not accede to the request of the respondent for deleting that clause and the Appellant had informed the claimant on 30-12-1995 that there was no change in the conditions of the supply order still claimant continued to supply the goods as per the order. Therefore, on the face of this condition there is no going back from that. In case the claimant was not inclined to accept this clause he could have very well withdrawn from the contract. But it did not do so and continued with the contract. Therefore, on the basis of the clear term of the contract, the claimant is bound by it and it has to Page 31 of 66 Appeal No192 of 2012 restore whatever MODVAT credit received by it to the Appellant security press. The view taken by the arbitrator that since it was not the condition when the tender was floated is not correct as after the complete contract having come into existence, there is no purpose to refer to the terms of tender. What is binding is the completed contract and not the terms of offer of the advertisement. Whatever may be the offers in the advertisement, once the completed contract has come into existence, this is binding. There are no two opinions in the matter in the present case that the terms and conditions of the supply order dated 31-5-1995 were complete. Therefore, what is binding is the terms of the contract and not the terms in the offer of advertisement. Therefore, under these circumstances the view taken by the arbitrator as well as the learned Single Judge and the Division Bench of the High Court is ex facie illegal. It is true that normally the courts are very slow in interfering with the findings and interpretation given by the arbitrator. So far as the principle of law is concerned, there are no two opinions and it has to be accepted. But the fact remains that if any perverse order is passed, then the courts are not powerless to interfere with the matter. As pointed out above, once the concluded contract has come into existence, then in that case the offer of advertisement cannot override the terms and conditions of the completed contract. Therefore, in our opinion, the view taken by the arbitrator, as affirmed by the learned Single Judge and the Division Bench of the High Court on the face of it is illegal and against the law."

38. The gist of the ratio laid down by the Hon'ble Supreme Court is as follows:

Page 32 of 66
Appeal No192 of 2012
(a) What is binding on the parties is the complete contract and not the terms of the offer of the advertisement. Whatever may be the offer in the advertisements, once the complete contract has come in to existence, the condition in the completed contract alone is binding and not the terms in the offer of advertisement.
(b) Once the complete contract has come into force, then in that case, the offer of advertisements cannot over ride the terms and conditions of the complete contract.

39. The ratio of the case would also not be applicable to the present case for the reason that the Tender Document dated 18.2.2010 was not a mere advertisement but was a complete document specifying detailed terms and conditions for supply of power. The Appellant in its offer dated 8.3.2010 has clearly mentioned that it had carefully perused the tender specification and agreed to abide by the same subject to deviation schedule. The deviation schedule in the offer did not mention the requirement of prior permission in case of change of sources. Thus, the Appellant had agreed to the conditions of prior permission. Clause 11 (xv) specifically provides that the terms and conditions in the tender document and in the order would be applicable since Page 33 of 66 Appeal No192 of 2012 the Appellant did not propose any deviation in this Clause and has, therefore, accepted the same.

40. As brought out in Para-21 above, the offer dated 8.3.2010 clearly mentioned that the offer is subjected to acceptance of Letter of Intent issued by the Distribution Licencee. There is nothing on record placed before this Tribunal to show that the Appellant had accepted the Letter of Intent. Thus, the contract cannot be considered to be a concluded contract but for clause 11(xv) of the Tender Document which provides that the bidder shall accept the offer failing which it shall be considered that the offer has been accepted. Thus, the Tender Document forms integral part of the contract, otherwise, there was no binding contract at all.

41. In view of the above, we find that the conclusion arrived at by the State Commission to the effect that the condition in the Tender Notice dated 18.2.2010 providing for the prior permission of the Distribution Licensee for the supply of electricity from alternate source also must be read into the agreement between the parties is correct and no interference is warranted by this Tribunal. So, the first issue is decided against the Appellant.

42. Let us now discuss about the 2nd Question regarding the failure to establish that there was a failure to get supply from Page 34 of 66 Appeal No192 of 2012 the Generators at the source of the Supply, the identified source.

43. As the 1st issue had been decided against the Appellant holding that the conditions in the tender document would also apply, this issue has become in-fructuous. However, we would like to decide this question on its merits for the sake of completion.

44. Now, according to the Respondent with reference to the 2nd issue even assuming that the Letter of Intent conditions can alone be considered, de-horse the tender conditions, the Appellant altogether failed to make out the case that there was failure of the Generator at the source of supply under Clause 3 (c) of the Letter of Intent conditions to supply electricity and therefore, the Appellant resorted to the option of getting supply from the alternate source.

45. It is further contended by the Respondent that there was no mention of the said failure of the identified generators in the letter dated 24.5.2010 sent by the Appellant to the Respondent Distribution Licensee informing about the arrangements of alternate source and in the absence of the proof of the same, by producing materials before the State Commission, the Appellant would not be entitled to claim the compensation.

Page 35 of 66

Appeal No192 of 2012

46. Let us now go into this aspect and refer to Clause 3 (c) of the Letter of Intent:

"3)(c): In case of failure of the generator(s) at the source of supply, the Trader/Seller can make available the agreed quantum of power as quoted above from any other alternate source(s) in such a way that the cost of power to MSEDCL at the MSETCL periphery shall be the same as the landed cost to MSEDCL at the MSETCL periphery at the rates quoted above. All other Terms and Conditions shall remain unchanged."

47. According to the Appellant, the sourcing of 39 MW of electricity by the Appellant from the State of West Bengal and Karnataka could not be effected on account of factors beyond the control of the Appellant due to the fact that the Karnataka State Government gave directions u/s 11 of the Act, 2003 and corridor from West Bengal was not available and, therefore, they informed this to the Distribution Licensee and made arrangements for getting power from the alternate source as per the conditions referred to in Clause 3

(c) of the Letter of Intent.

48. Let us refer to the findings on this issue given by the State Commission which is as under:

"(d) From the documents placed on record it is clear on plain reading that the Petitioner's leeway to procure power from alternate sources was not an unbridled right, it was subject to conditions viz.,
(i) Clause 3 (c) in Annexure 1 to the letter of Intent dated March 22, 2010 provides that "3 (c) Page 36 of 66 Appeal No192 of 2012 In case of failure of the generator(s) at the source of supply, the trader/seller can make available the agreed quantum of power as quoted above from any other alternate source(s)...."

(ii) Clause (vii) of the Bid document for purchase of 500 MW is RTC power on firm basis during June 1, 2010 to June 20, 2010 states "..... In case the corridor is not available and Bidder desires to supply the contracted quantum of power through other source/ corridor, then Bidder should obtain prior permission of MSEDCL". Admittedly, none of the above conditions could be proved by documentary evidence viz failure of the generator(s) at the source of supply. The Commission is of the view that if due to Section 11 directions by State Governments the generators could not supply outside their State periphery then TPTCL should have submitted documentary evidence to MSEDCL about the same and ought to have taken up the matter at some level of conclusion or mitigation. However, nothing of the sort took place and simpliciter a contract was entered into with an alternate party viz GUVNL. Some meaning has to be given to the words " In case of failure of the generator(s) at the source of supply". Whether the generator failed or not is to be recognized by MSEDCL as well as TPTCL and not only by TPTCL. However, TPTCL went ahead on the basis that the generator failed and did not bother to seek the buy in of MSEDCL on the issue of failure due to Section 11 directions of the State Government. These would point out to one sided actions by TPTCL. There were no joint discussions between the parties on the aspect of "failure of the generator(s) at the source of supply".

Hence, the Commission is of the view that the condition required for triggering the right of TPTCL to Page 37 of 66 Appeal No192 of 2012 supply from alternate source/s has to be said not to have occurred. Hence, how can TPTCL claim any compensation to meet its liability with the third party (alternate source) from which it contracted to procure power when TPTCL itself did not have the right at that point in time to procure from alternate sources. Therefore, TPTCL's claim is not sustainable. If the generator has failed to supply to TPTCL due to Section 11 directions TPTCL should proceed against the generator and claim damages. It should thereafter compensate GUVNL from the monetary damages it receives from the generator which failed to supply. The Commission notes that the failure to supply 15 MW by the CPP in West Bengal is not due to Section 11 directions of the State Government. If 15 MW power from CPP in West Bengal was not available due to the SLDC not giving necessary Open Access clearance then TPTCL was duty bound to inform MSEDCL with reasons and seek mutual consent for scheduling of the power from alternate source. Why the generator failed to supply to TPTCL was required to be discussed by TPTCL with MSEDCL and their buy in sought. TPTCL could not have moved on its own to contract out 15 MW (being part of 39 MW) from GUVN".

49. The gist of the findings is as follows:

(a) When the Appellant was unable to get supply from the Generators in WB and Karnataka, the Appellant should have submitted documentary evidence to the Distribution Licensee about the inability and ought to have come to some level conclusion through mutual discussion. The wordings Page 38 of 66 Appeal No192 of 2012 in Clause 3 (c) "in case of failure of the Generator(s) at the source of supply" should not mean that the Tata Power Company could go ahead for arranging alternate source on the basis that the Generator failed without having discussion with the Distribution Licensee on the issue of failure of the Generator at the source of supply due to unavoidable situation. This is one sided action of the Tata Power. Admittedly, there was no joint discussions between the parties on the aspect of failure of the generator(s) at the source of supply.
(b) The reason for the failure to get supply from WB and Karnataka should have been informed to the Distribution Licensee and sought mutual consent for scheduling of the power from the alternate source.

This was not done. Therefore, the condition contained in Clause 3 (c) of the Letter of Intent cannot be said to be fulfilled.

50. In the light of the said findings, let us discuss the issue now.

51. It is not in dispute that there is a specific condition mentioned in Clause 3 (c) of the Letter of Intent with regard to the failure of the identified Generators at Karnataka and West Bengal as the source of supply in order to resort to the option of getting supply from alternate source. The first Page 39 of 66 Appeal No192 of 2012 information which was conveyed by the Appellant to the Distribution Licensee with regard to their option for getting supply from alternate source was through the letter dated 24.5.2010. The letter dated 24.5.2010 is reproduced below:

"TPTCL/MSEDCL/KK/FY11/523 24th May, 2010 Chief Engineer (Power Purchase) Maharashtra State Electricity Distribution Company Ltd. Prakashgad, 5th Floor, Mumbai 400051 Fax: 022-26580645 Dear Sir, Sub: Sale of power to MSEDCL for the month of June 2010 This has reference to your LOI No. MSEDCL/PP/TPTCL/8750 Dated 22.03.2010. We would Like to inform you that TPTCL has received LOI from MSEDCL for purchase of 15 MW power from CPP in West Bengal and 24 MW from CPP in Karnataka for the month of June 2010. We would be in a position to supply this quantum of power from a single alternate source, GUVNL, at the landed cost same as that of CPP in West Bengal and CPP in Karnataka as per your LOI. The Details are as follows:
S.No. Source Duration Quantum Revised Estimated as per LOI Quantum Landed Cost (Rs./Kwh)
1. CPP in West 1st -30th June 2010 15MW NIL 6.45 Bengal
2. CPP in 1st -30th June 2010 24MW NIL 6.45 Karnataka This shortfall in 39MW quantum of power of shall be supplied from source mentioned below:
Page 40 of 66
Appeal No192 of 2012 S.No. Source Duration Quantum as Rate at Estimated per LOI Delivery Landed point(Rs./Kwh) Cost (Rs./Kwh)
1. GUVNL 1st -30th June 39MW 5.87 6.32 2010 ` All other terms and condition will remain same as per above mentioned LOI:
Thanking you Yours sincerely Sd/-
(J D Kuklarni) Chief Operating Officer CC: CLD (Kalwa)"
52. In this letter, there is no reference about the failure of generators at West Bengal and Karnataka at the source of supply and no reasons have been given for the failure to get the supply as mandated in Clause 3 (c) of the Letter of Intent.
53. On receipt of this letter, the Distribution Company sent a reply on 31.5.2010 which is quoted as under:
"Sir, TPTCL has offered vide the letter cited at reference (2) above to supply 30MW from SKS Ispat and 18 MW from two different alternate sources at the same landed cost as that of SKS Ispat as per the LOI dated 19.12.2009 as per which 50MW was to be supplied Page 41 of 66 Appeal No192 of 2012 from SKS Ispat during 1st to 30th June 2010. MSEDCL do not wish to avail power from the alternate sources as offered and the 30 MW available at SKS Ispat only will be avail. The LOI dated 19.12.2009 will stand amended to this extent.

Through the letter cited at reference (4) above, TPTCL has offered to supply 39Mw from GUVNL against the 15MW to be supplied from CPP in West Bengal and 24 MW to be supplied from CPP in Karnataka as per the LOI dated 22.03.2010. MSEDCL do not wish to avail power from the alternate source as offered and the LOI dated 22.03.2010 shall remain amended to this extent.

The Open Access Consent/approval for the month June 2010 may accordingly be obtain only as per the aforesaid modification to the respective LOIs:

All other terms and conditions as per the respective LOIs will remain the same and applicable in both the above cases.
Yours faithfully, Sd/-
Director (operations) MSEDCL"
54. The prompt reply made by the Distribution Licensee on 31.5.2010 would show that the Distribution Company did not wish to avail power from the alternate source as offered. It is true that they have not given the reasons for refusal to accept the supply on the ground that the details in the letter dated 24.5.2010 did not reflect the failure to get supply from Page 42 of 66 Appeal No192 of 2012 West Bengal and Karnataka. They simply stated in the reply dated 31.5.2010 that they did not wish to avail power from the alternate source.
55. But this reply letter dated 31.5.2010 should not be taken to mean that the Appellant has informed the Distribution Licensee about the failure of the Generators at West Bengal and Karnataka to supply contracted power due to the reasons beyond its control. The fact remains, the Appellant did not inform about its inability to get supply before it resorted to arrangements for getting supply from alternate source. But, as pointed out by the Appellant, this has been informed to the Distribution Licensee in the subsequent letter dated 19.7.2010, while claiming compensation. The relevant portion of the letter is reproduced below:
"Pursuant thereto, CPP in Karnataka informed TPTCL that due to the imposition of Section 11 in Karnataka, they were not in a position to supply 24 MW of power to TPTCL which in turn was supposed to be supplied to MSEDCL. Further, 15 MW power from CPP in West Bengal was also not available as the SLDC did not give the necessary Open Access clearance for the same.
In an effort to fulfil the commitment to MSEDCL, TPTCL put a lot of effort to arrange the power from alternate sources of supply. Accordingly, TPTCL participated in GUVNL tender to supply of 39 MW power to MSEDCL at the same landed rate and under same compensation terms. TPTCL had won the Page 43 of 66 Appeal No192 of 2012 tender and GUVNL issued an Order dated May 24, 2010 for supplying 39 MW of power to TPTCL with compensation. It was provided in the GUVNL order that in case TPTCL fails to off take 80% of the contracted capacity, TPTCL shall pay to GUVNL, a compensation @ Rs.2/-per unit for shortfall in off take. After securing the power from GUVNL for supply to MSEDCL, TPTCL sent a letter dated May 24, 2010 to MSEDCL intimating that instead of supplying 15 MW of power from CPP in West Bengal and 24 MW of power from CPP in Karnataka, TPTCL desires to supply 39 MW of power from alternate source viz. GUVNL at the same landed cost as that of CPPs in Karnataka and West Bengal as provide din the Annexure I of Order dated March 22, 2010. TPTCL applied to SLDC for booking corridor for the supply of power from GUVNL to MSEDCL. However, to TPCL's surprise, MSEDCL vide its letter dated May 31, 2010 just one day prior to the supply of power, unilaterally declined TPTCL's request for change in the source of power and refused to off-take 39 MW power from GUVNL without giving any reason, whatsoever.
.............................
We request you to kindly arrange to pay the above compensation bill amount to Rs.2,03,48,000/- on or before the due date i.e. 29.7.2010 failing which late payment surcharge at the rate of 15% per annum will be applicable".

56. This letter would show that there is a reference about their inability to get supply from its Generators in Karnataka and West Bengal at the source of supply. The very same Page 44 of 66 Appeal No192 of 2012 reference has been made in the Petition also filed on 16.11.2010 before the State Commission which is as under:

"11. As per the terms and conditions applicable, there was no restriction on the Petitioner to source electricity from a different source and supply the same to the Respondent, provided that the landed cost of supply at the Respondent's periphery did not increase as a result of the change of the source. Clause 3 (c) of Annexure 1 to the Letter of Intent provides as under:
"In case of failure of the generator(s) at the source of supply, the Trader/Seller can make available the agreed quantum of power as quoted above from any other alternate source(s) in such a way that the cost of power to MSEDCL at the MSETCL periphery shall be the same as the landed cost to MSEDCL at the MSETCL periphery at the rates quoted above. All other Terms and Conditions shall remain unchanged."

12. The Petitioner states that the sourcing of 39 MW of electricity by the Petitioner from the State of Karnataka and West Bengal could not be effected on account of factors beyond the control of the Petitioner including by reasons of imposition of notification by the Government of Karnataka in the State purporting to be under Section 11 of the Electricity Act, 2003."

57. So, the above Petition filed by the Appellant before the State Commission with reference to Clause 3 (c) of the Letter of Intent, the Appellant has stated that the sourcing of 39 MW of electricity from the State of WB and Karnataka could not be effected on account of the factors beyond the control of the Appellant.

Page 45 of 66

Appeal No192 of 2012

58. According to the Respondent, even though this reference has been made in the last letter dated 19.7.2010 and the Petition dated 16.11.2010, they failed to mention the same in their first letter dated 24.5.2010 which led to the refusal to get the supply from the alternate source through its reply dated 31.5.2010.

59. It is true that in the earlier letter dated 24.5.2010, the Appellant failed to mention the fulfilment of the essential conditions referred to in Clause 3 (c) of the Letter of Intent with reference to their failure to get supply, but the fact remains that this has been mentioned in the subsequent letter claiming the compensation on 19.7.2010 and their Petition dated 16.11.2010 filed before the State Commission.

60. Now, the question is whether such a plea which was made by the Tata Power Company in the Petition before the State Commission had been established by the Petitioner by producing documentary evidence before the State Commission with regard to the failure to get supply from the identified sources to enable the State Commission to come to the conclusion with reference to the fulfilment of the main ingredients of the Letter of Intent. Admittedly, those materials were not produced before the State Commission. The State Commission, after going through the Letter of Intent conditions and also having regard to the fact that this Page 46 of 66 Appeal No192 of 2012 aspect had not been informed and discussed by the Appellant with the Distribution Licensee before resorting to the alternate source has correctly decided that the Appellant has failed to establish the element of the "failure of the Generator(s) to supply at the source of supply".

61. This finding, in our view, is perfectly justified. Thus, 2nd question is decided against the Appellant.

62. The next question relates to Open Access which is said to have been obtained to satisfy the condition in Clause No.4

(a) of the Letter of Intent.

63. According to the Appellant, despite the fact that application for Open Access had been filed and the same had been obtained by the Appellant, the State Commission wrongly held that Open Access was not obtained and consequently, the compensation was not payable.

64. Refuting this contention of the Appellant, the Respondent submitted that the Distribution Licensee has not obtained the Open Access for supply of electricity from Gujarat Urja Vikas Nigam and therefore, the question of compensation would not arise at all. So, the question raised is whether the claim for compensation for failure to "off take" the electricity requires Open Access approval under the provisions of the Agreement and if so, whether such approval was obtained by the Appellant.

Page 47 of 66

Appeal No192 of 2012

65. On this issue, the State Commission has held that grant of Open Access is essential to satisfy the condition as specified in Clause 4 (a) of the Letter of Intent to claim the compensation.

66. Let us now refer to the discussions and findings of the State Commission on this issue:

"Issue No. 2:- Was Open Access obtained for supply by TPTCL from GUVNL?
Finding:
Amongst the documents submitted by TPTCL it was found that an application dated 26.05.2010 was made by TPTCL to obtain Open Access approval from WRLDC/SLDC (Gujarat & Maharashtra), however there was no document to show that such an approval was granted by the said SLDC/RLDC nor a consent letter was obtained from MSEDCL prior to the application for booking of an Open Access as required in LOI letter. Hence, no Open Access was obtained by TPTCL. In other words Open Access permission was yet to be granted to it by the SLDC/RLDC for the 39 MW of power which was to be procured from GUVNL (as per TPTCL letter dated 24 May 2010 to MSEDCL). On the other hand, the Terms and Conditions at Annexure 1 to the Letter of Intent dated March 22, 2010 states that MSEDCL shall be liable to pay Compensation "In case MSEDCL fails to avail 80% of approved Open Access capacity during the above period from Trader/Seller , then MSEDCL shall pay compensation @RS.2.00/KWH for each unit that fall short of 80% of the approved Open Access ". MSEDCL submitted that the question of MSEDCL compensating the Petitioner for a transaction for which Open Access has Page 48 of 66 Appeal No192 of 2012 not been approved does not arise. The Commission sustains the contention of MSEDCL. TPTCL cannot demand MSEDCL to pay compensation @RS.2.00/KWH for each unit because Open Access was not granted and because the entire basis of the provision of compensation @RS.2.00/KWH for each unit for fall short of 80% is when the procurer fails to avail the power for which Open Access has been granted. Hence, the claim of TPTCL is not sustainable."

67. The perusal of the findings in the impugned order would reveal that even though the Appellant filed an application on 26.5.2010, to obtain Open Access approval from Regional Load Despatch Centre and State Load Despatch Centre, there was no document produced by the Appellant before the State Commission to show that such an approval was granted and therefore, the State Commission has held that no Open Access was obtained by the Tata Power Company and hence the claim for compensation by the Appellant is not sustainable.

68. The relevant condition for obtaining Open Access is mentioned in Clause 4 (a) to (b) of the Letter of Intent. Clause 4 (a) and (b) is quoted below:

"4) Compensation
a) Compensation Payable by MSEDCL In case MSEDCL fails to avail 80% of approved Open Access capacity during above period from Traders/Seller, then MSEDCL shall pay compensation Page 49 of 66 Appeal No192 of 2012 @ Rs.2.00 per kWh for each unit that fall short of 80% of approved Open Access.
b) Compensation Payable to MSEDCL Trader/Seller will book the Corridor for the full order quantum as above and if the supply is less than 80% of approved Open Access capacity, then the shortfall shall be settled @ Rs.200 per kWh for each unit that fall short of the 80% of the approved Open Access.

For any compensation payable by MSEDCL/Trader as above, invoice shall be raised by respective party or as the case may be and payment shall be raised by respective party or as the case may be and payment shall be made within 10 days, in payment, surcharge will be payable on day to day basis for the period of delay at 15% per annum.

The Trader shall produce the compensation claim of the Seller/Generator."

69. The reading of the above clause would reveal that there is a specific condition in the Letter of Intent dated 22.3.2010 that in case, the Distribution Licensee fails to avail 80% of the approved Open Access capacity during the fixed up period from the seller, then the Distribution Licensee shall pay the compensation at the rate of Rs.2.00 per kWh for each unit that falls short of 80% of the approved Open Access. This shows that to claim compensation, the Appellant has to necessarily obtain Open Access in order to show to the State Commission that Distribution Licensee has failed to "off take" the delivery falling short of 80% of the approved Open Access capacity.

Page 50 of 66

Appeal No192 of 2012

70. According to the Appellant, the Application for Open Access was in fact filed before the Load Despatch Centre and the same has been obtained and on that basis they approached the State Commission claiming the compensation and despite that, the State Commission has given a wrong finding. This is the consistent stand taken by the Appellant before the State Commission as well as before this Tribunal.

71. Let us quote the relevant plea made by the Appellant before the State Commission as well as before this Tribunal taking the above stand.

72. Firstly let us refer to the Petition filed before the State Commission on 16.11.2010 filed by the Appellant. In Para 15, 24 and 28 of the Petition, the Appellant has stated as follows:

"15. Based on the above, the Petitioner also applied for and procured Open Access for transmission of electricity to the periphery of the Respondent. A copy of the Open Access application filed by the Petitioner is attached hereto and marked as Annexure 'G'. ..........................
24.....................The Open Access was sought for and approved for the above quantum of power to reach the Maharashtra periphery. In view of the above, the Respondent was required under the Agreement to off-take the power contracted for or pay compensation for any failure to do so below 80% of the contracted power for which Open Access was approved.".
Page 51 of 66

Appeal No192 of 2012 .................

28. It is submitted that in view of the above, the Petitioner is entitled to recover the compensation amount at the rate of Rs.2/- per unit of the electricity not off taken by the Respondent below 80% of the contracted capacity for which Open Access was approved."

73. On the basis of the above statements, the Petitioner has made the following prayer before the State Commission:

Prayed to:
"29 (a) Hold that the Respondent has acted in violation of the Agreement between the parties in not off-taking the electricity offered by the Petitioner in the month of June, 2010 to the extent of 80% of the contracted capacity for which Open Access was approved."

74. So, the specific stand taken by the Appellant before the State Commission was that it obtained the Open Access approval and 80% of the capacity for which the Open Access was approved was not taken delivery by the Distribution Licensee in violation of the Agreement and that therefore, the Appellant/Petitioner would be entitled to compensation.

75. Let us now refer to the very same plea made before this Tribunal. In Synopsis "A", the Appellant has made the following statement:

".......Further, State Commission has come to a factually incorrect finding contrary to the admitted Page 52 of 66 Appeal No192 of 2012 position that Open Access was not obtained by the Appellant.......".

76. From this statement, it is clear that the Appellant has pleaded that the State Commission came to incorrect conclusion that Open Access was not obtained even though it is admitted position that the Open Access was obtained.

77. In the list of dates, the Appellant has made the following reference relating to the date 26.5.2010:

"26.05.2010: The Appellant made an application for Open Access and permission was granted by the Western Regional Load Dispatch Centre (WRLDC) and by the Maharashtra State Load Dispatch Centre (MSLDC) for transmission of electricity from GUVNL to Respondent No.1. The Open Access was obtained by the Appellant."

78. In the 'Facts' given in the Appeal in paragraph-M, the Appellant has stated as follows:

"M. On 26.5.2010, the Appellant made an application for Open Access and permission was granted by the Western Regional Load Dispatch Centre (WRLDC) and by the Maharashtra State Load Dispatch Centre (MSLDC) for transmission of electricity from GUVNL to Respondent No.1. A copy of the Application for Open Access and the Open Access being granted to the Appellant is attached hereto and marked as Annexure F."

79. In the question of law at Page 8 of the Appeal, the Appellant raised the following question for consideration by this Tribunal:

Page 53 of 66
Appeal No192 of 2012 "A. Whether the State Commission is correct in rejecting the claim of the Appellant for compensation under Clause 4 (a) of the letter of intent on the purported ground that Open Access was not granted to the Appellant when Open Access in fact and admittedly had been granted" ?

80. Through this question, framed in the Appeal, the Appellant has made a categorical statement that the Open Access was, in fact, had been granted to the Appellant and the same is an admitted fact.

81. In ground I and J, the Appellant has raised the following:

"I. The State Commission has erred in holding that no Open Access was granted to the Appellant for supply of electricity from GUVNL. The State Commission has failed to appreciate that the said issue did not even arise before the State Commission for adjudication as it was an admitted position between the parties that the Open Access was available. Once the Respondent No.1 had admitted the position, there is no further evidence to be led and it was not open to the State Commission to still hold that there was no evidence of Open Access being granted. The State Commission was dealing with adjudication of disputes that had arisen between the Appellant and Respondent No.1 and in such proceedings when a factual position is admitted between the parties, there is no need to produce evidence to prove the same. J. The State Commission failed to appreciate that Open Access was obtained by the Appellant for sourcing electricity from GUVNL. Based on the Open Access granted to the Appellant, the Appellant actually supplied some quantum of electricity from GUVNL to the Respondent No.1 during the month of Page 54 of 66 Appeal No192 of 2012 June, 2010. Despite the above position, the State Commission erred in coming to the conclusion that no Open Access was granted. The State Commission erred in going on technicalities that a copy of the Open Access approval was not available on record when in fact the Open Access being procured by the Appellant was admitted by the Respondent No.1".

82. The reading of the grounds I and J, in the Appeal would clearly indicate that the Appellant pleaded that both the parties before the State Commission accepted that the Open Access was available and despite that, it was not open to the State Commission to hold that there was no evidence of Open Access being granted. It is also noticed from the Ground No. J that the Appellant obtained Open Access and based on the said Open Access, the Appellant actually supplied some quantum of electricity from Gujarat Urja to the Distribution Licensees during the month of June, 2010 and this fact was also admitted by the Distribution Licensee.

83. The above factors would reveal that both in the Petition filed before the State Commission and the Appeal grounds taken before this Tribunal, the Appellant has specifically stated that the Appellant obtained Open Access which is not disputed by the Distribution Licensee and on the basis of the said Access, some powers had been injected to the Distribution Licensee which would entitle the Appellant to Page 55 of 66 Appeal No192 of 2012 claim compensation as per Clause 4 (a) of the Letter of Intent dated 22.3.2010 and that therefore State Commission's finding against the Appellant is totally wrong.

84. On these pleadings, we have heard the learned Counsel for both the parties who argued at length. After the hearing was over, we directed both the parties to file their written submissions. Accordingly they filed the Written Submissions. Even in the written submissions, the Appellant has categorically mentioned that the Appellant applied for the Open Access and obtained the Open Access for supply of electricity from Gujarat Urja to Distribution Licensee. The following is the relevant reference :

"15. The Appellant also applied for and obtained Open Access for supply of electricity from Gujarat to the Respondent No. 1.
.....................
22. The State Commission has also incidentally held that though the Open Access was obtained (which was also admitted by the Respondent No.1), the Open Access approval was not placed on record".

85. So, these portions of the statements made by the Appellant both in the Appeal as well as in the written submission would make it clear that the Appellant took up a specific stand that it obtained the Open Access thereby fulfilling the condition of Clause 4 (a) of the Letter of Intent and despite Page 56 of 66 Appeal No192 of 2012 that the State Commission refused to order for compensation.

86. Let us now see as to whether the stand taken by the Appellant is on the basis of the actual facts in the light of the materials available on record.

87. According to the Distribution Licensee, it has specifically taken a stand before the State Commission that no such Open Access was granted by the Load Despatch Centre and the stand of the Respondent had been recorded in the impugned order. The same is as follows:

"15........................MSEDCL further submitted that the Petitioner has not annexed copy of the Open Access approval procured. MSEDCL also submitted that as per the Clause 4 (a) of the Terms and Conditions at Annexure 1 to the Letter of Intent dated March 22, 2010 MSEDCL shall be liable to pay Compensation "In case MSEDCL fails to avail 80% of approved Open Access capacity during the above period from Trader/Seller , then MSEDCL shall pay compensation @RS.2.00/KWH for each unit that fall short of 80% of the . MSEDCL submitted that the question of MSEDCL compensating the Petitioner for a transaction for which Open Access has not been approved does not arise."

88. From this, it is clear that the Distribution Licensee had taken a clear stand before the State Commission that Open Access was not granted to the Appellant and that in the absence of the Open Access being granted, the question of the Distribution Licensee compensating the Appellant for a Page 57 of 66 Appeal No192 of 2012 transaction for which the Open Access has not been approved, does not arise.

89. When such was the stand taken by the Distribution Licensee before the State Commission, it is surprised to see that the Appellant has pleaded before this Tribunal that the State Commission wrongly concluded that Open Access was not granted even though both parties admitted that the same had been granted to the Appellant.

90. As mentioned earlier, though the Appellant has pleaded in the Appeal grounds as well as in the Written Submissions that Open Access was in fact granted, no document has been produced before this Tribunal to substantiate the same.

91. That apart, it cannot be disputed that the Open Access cannot be granted by SLDC in the absence of the no objection certificate issued by the Distribution Licensee. It is the specific stand taken by the Distribution Licensee that even though it has applied for "No Objection Certificate" for Open Access, the Distribution Licensee did not issue the no objection certificate as they did not incline to take delivery of the supply of electricity through its alternate source and consequently Open Access had not been granted by the Load Despatch Centre.

Page 58 of 66

Appeal No192 of 2012

92. When such being the case, how could the Appellant as mentioned in the Ground No.J of the Appeal that the Open Access was in fact, obtained by the Appellant and based on the said Open Access, the Appellant had actually supplied some quantum of electricity from Gujarat Urja to the Distribution Licensee during the month of June, 2010? There is no answer for this question.

93. Thus, we find from the beginning to the end that the Appellant has taken an incorrect stand that it obtained Open Access and 80% of the capacity for which the Open Access was granted but it was not taken delivery by the Respondent and that therefore, they would be entitled for compensation for the said 80% or the Open Access capacity.

94. As mentioned earlier, the Appellant based its claim on the basis of the Clause 4 (a) of the Letter of Intent conditions which are set out in the earlier paragraphs.

95. In fact, prayer (a) of the claim by the Appellant in their Petitions is in terms of Clause 4 (a) of the Letter of Intent. The said prayer is as follows:

"(a) hold that the Respondent has acted in violation of the Agreement between the parties in not off-taking the electricity offered by the Petitioner in the month of June, 2010 to the extent of 80% of the contracted capacity for which Open Access was approved."
Page 59 of 66

Appeal No192 of 2012

96. From the reading of the clause 4 (a) of the Letter of Intent conditions and prayer (a) of the claim it is obvious that admittedly obtaining the Open Access approval is an essential condition and fulfilment of the said condition is sin qua non for claiming the compensation.

97. Now, we have to refer to the findings of the State Commission that the Open Access was not in fact actually granted and therefore, consequent prayer (a) of the Petitioner was not maintainable. The said findings in the impugned order are given below:

"Amongst the documents submitted by TPTCL it was found that an application dated 26.05.2010 was made by TPTCL to obtain Open Access approval from WRLDC/SLDC (Gujarat & Maharashtra), however there was no document to show that such an approval was granted by the said SLDC/RLDC nor a consent letter was obtained from MSEDCL prior to the application for booking of an Open Access as required in LOI letter.
Hence, no Open Access was obtained by TPTCL. In other words Open Access permission was yet to be granted to it by the SLDC/RLDC for the 39 MW of power which was to be procured from GUVNL (as per TPTCL letter dated 24 May 2010 to MSEDCL). On the other hand, the Terms and Conditions at Annexure 1 to the Letter of Intent dated March 22, 2010 states that MSEDCL shall be liable to pay Compensation "In case MSEDCL fails to avail 80% of approved Open Access capacity during the above period from Trader/Seller , then MSEDCL shall pay compensation @RS.2.00/KWH for each unit that fall short of 80% of Page 60 of 66 Appeal No192 of 2012 the approved Open Access.". MSEDCL submitted that the question of MSEDCL compensating the Petitioner for a transaction for which Open Access has not been approved does not arise. The Commission sustains the contention of MSEDCL. TPTCL cannot demand MSEDCL to pay compensation @RS.2.00/KWH for each unit because Open Access was not granted and because the entire basis of the provision of compensation @RS.2.00/KWH for each unit fall short of 80% is when the procurer fails to avail the power for which Open Access has been granted. Hence, the claim of TPTCL is not sustainable".

98. As indicated above, both the parties were directed to file the Written Submissions and we have gone through the written submissions of both the parties.

99. On going through the Written Submissions of the Distribution Licensee, we find that the Respondent took a consistent stand that Open Access was not granted as pleaded before the State Commission. Therefore, we asked the Appellant seeking clarification of the stand that Open Access was in fact obtained but even then, the compensation was refused on wrong finding that Open Access was not obtained. Then, learned Counsel took some time to get instructions on this aspect from the Appellant. Accordingly, time was granted. Thereupon, the Appellant filed Additional written submissions on 10.4.2013, taking a complete contrary stand admitting that Open Access was not obtained by narrating some circumstances. The relevant portion of the Page 61 of 66 Appeal No192 of 2012 submissions made by the Appellant in the additional Written Submissions are as follows:

"4. Apart from the above, the Respondent No. 1 has mainly relied on Clause 4 (a) of the LOI which uses the words 'for which Open Access has been obtained'. The contention of the Respondent No. 1 is that since the open access was actually not obtained despite the application being made by the Appellant, no compensation is payable.
5. It is respectfully submitted that the Appellant had written to the Respondent No. 1 vide letter dated 24.5.2010 about replacement of power source namely GUVNL.
6. The Respondent No. 1 by its letter dated 31.5.2010 stated they do not need power. This letter dated 31.5.2010 was pertaining to the supply of power to begin from 1.6.2010 and for which the Appellant had already entered into contract with GUVNL.
7. In the meantime, the Appellant had sent application for Open Access to the SLDC with application for No Objection from the Respondent No. 1. However, the no objection was not given since the Respondent No. 1 had declined to take the power itself. Though this was not given in writing but specifically pleaded before the State Commission.
................
Shri. J. D. Kulkarni submitted that for getting the Transmission Open Access approval, the consent from MSEDCL was also requested, which it has however refused to provide."

8. It is submitted that for Intra-state Open Access, endorsement is required from purchaser and only then can the application be made to any State SLDC.

Page 62 of 66

Appeal No192 of 2012

9. Since the Respondent No. 1 did not provide approval / endorsement and in fact refused to take the power, the Appellant could not apply for intra-state Open Access to Maharashtra SLDC.

10. For Inter-state transactions (GUVNL to MSEDCL) approval is required from seller and buyer state's SLDC for making an application to RLDC. Hence the same could not be obtained."

.............................

13. Therefore, it is not open to the Respondent No.1 to rely on Clause 4.1 (a) when the Open Access was being held back due to the acts of the Respondent No.1 itself."

100. The above statement made by the Appellant in its additional Written Submissions would clearly indicate that it has taken a different stand before this Tribunal to the effect that Open Access was not obtained due to the fact that Distribution Licensee did not provide endorsement. On that basis, it is now argued by the Appellant that Clause 4 (1) (a) of the Letter of Intent conditions cannot be relied upon by the Respondent, when the Open Access was being held back due to the attitude of the Distribution Licensee.

101. We are not able to appreciate this stand which is completely contrary to the earlier stand taken by the Appellant.

102. As discussed above, the main prayer in the Petition filed before the State Commission was that the Appellant was Page 63 of 66 Appeal No192 of 2012 entitled for compensation as per Clause 4 (a) of the Letter of Intent since the Distribution Licensee failed to avail 80% of the approved Open Access capacity and therefore, the Distribution Licensee should be directed to pay the compensation.

103. In order to seek for the said relief as per the prayer (a), in the petition, the the Appellant has categorically mentioned that the Appellant had already obtained Open Access and as such the compensation as per Clause 4 (a) is payable to the Appellant. Rejecting this prayer, the State Commission dismissed the said application on the ground that Open Access which would attract Clause 4(a) was not obtained.

104. This cannot be challenged by the Appellant by merely stating that the State Commission decided the said aspect only as the main issue relating to the option of the Appellant to supply electricity from the alternate source on the basis of the Letter of Intent above and not on the basis of the tender notice. This contention is not tenable..

105. The State Commission is not only concerned with the issue with reference to the interpretation of the conditions in the offer bid submitted by the Appellant as well as the Letter of Intent de-horse the tender notice but also with reference to the entitlement of the Appellant to claim the compensation on the basis of the fulfilment of the essential condition Page 64 of 66 Appeal No192 of 2012 namely grant of Open Access as referred to in Clause 4 (a) of the Letter of Intent.

106. Now, through the additional written submissions, the Appellant has admitted that no Open Access was obtained, hence, the prayer made by the Appellant seeking for the compensation as per Clause 4 (a) of the Letter of Intent is not maintainable as correctly held by the State Commission.

107. Summary of Our Findings

(a) Prior permission of the Distribution Licensee was required for any change of source for supply of contracted power.

(b) Appellant did not demonstrate that change of source of supply of contracted power was due to failure of identified generators.

(c) Admittedly, Appellant did not obtain Open Access from WRIDC/MSLDC for transfer of power. As such, it is not entitled for compensation.

Page 65 of 66

Appeal No192 of 2012

108. In view of the above summary of findings, the Appeal is dismissed as devoid of merits. However, there is no order as to costs.





(V J TALWAR)               (Justice M. Karpaga Vinayagam)
Technical Member                          Chairperson

Dated: 03rd July, 2013

√REPORTABLE/NON-REPORTABALE




                                                       Page 66 of 66