Karnataka High Court
N.Amman Raju And Ors vs The State Of Karnataka & Ors on 12 December, 2018
Author: Aravind Kumar
Bench: Aravind Kumar
1
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 12TH DAY OF DECEMBER-2018
PRESENT
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
AND
THE HON'BLE MR.JUSTICE P.G.M.PATIL
WRIT APPEAL NO.200557/2018 &
NOS.200618-622/2018 & 200623-637/2018 (GM-KEB)
BETWEEN:
1. N.Amman Raju S/o Venkatakrishna Rao,
Aged: about 44 years, Occ: Agriculture.
2. N. Seetaratnam W/o Venkatakrishna Rao,
Aged: about 59 years, Occ: Agriculture.
3. N. Sudha W/o N.Amman Raju,
Aged: about 34 years, Occ: Agriculture,
4. N. Srikant S/o N.Amman Raju,
Aged 23 years, Occ: Student.
5. N. Raghu S/o N. Amman Raju,
Aged 22 years, Occ: Student.
6. N. Nageshwar Rao S/o Venkatkrishna Rao,
Aged: about 39 years, Occ: Agriculture,
7. Durgarani W/o N.Nageshwar Rao,
Aged: about 37 years, Occ: Agriculture.
8. N. Shrihari S/o N. Venkatkrishna Rao,
Aged about 37 years, Occ: Agriculture.
2
9. N. Naveena W/o N.Srihari,
Aged: about 35 years, Occ: Agriculture.
All R/o Sasalmari Camp,
Taluka: Sindhanur,
Dist: Raichur.
... Appellants
(By Sri. Ameet Kumar Deshpande, Advocate)
AND:
1. The State of Karnataka
Represented by its
Principal Secretary,
Department of Energy,
Vikasa Soudha,
Bangalore-560 001.
2. Gulbarga Electricity Supply Company Ltd.,
Represented by its
Managing Director,
Main Road, Kalaburagi-585102.
3. The Executive Engineer (ELE),
O & M Division, GESCOM,
Sindhanur,
District: Raichur-584101.
... Respondents
(By Sri. K.M.Ghate, AGA for R1;
Sri. Ravindra Reddy, Advocate for R2 & R3)
This writ appeal is filed under Section 4 of the
Karnataka High Court Act, praying to allow this appeal, and
to set aside the final order dated 21.03.2018 passed in
W.P.No.202716-202737/2017 and to pass any other
appropriate orders, in the interest of justice.
This appeal coming on for orders this day, Aravind
Kumar J., delivered the following:
3
JUDGMENT
This intra Court appeals are directed against the order dated 21.03.2018 passed in W.P.Nos.202716- 202737/2017, whereunder writ petitions filed by appellants came to be disposed of by reserving liberty to approach the Government pursuant to Clause 20 of Solar Policy 2014-2021 notified as per the notification bearing EN-21-VSC-2014 dated 22.05.2014 by seeking for amendment/review/relaxation/interpretation so as to save the petitioners project which is said to have been commenced pursuant to various agreements entered into between the petitioners and the fourth respondent or in the alternative to exhaust their remedy before the Civil Court. The factual aspects which had led to filing of these appeals can be crystallized as under:
2. During the year 2015, respondent No.2 called for application form interested persons who 4 intend to set up "Solar Rooftop System (hereinafter referred to 'SRTP' for short) for generating Solar Power on the existing rooftop and to the sell the same to respondent No.2 after utilizing the power so generated for their own use of consumption. Pursuant to same, petitioners are said to have submitted their applications for installation of SRTPV upon the existing sheds which were said to be under construction. Thereafter, power purchase agreement came to be entered into between petitioners and the respondent No.2 between the dates of 25.01.2016 to 03.02.2016. Petitioners are said to have invested huge amounts and the buildings on which SRTPV were to be installed was considerably completed and at that point of time by order dated 24.08.2016 Annexure-B series, the agreements entered into between petitioner and second respondent came to be cancelled by 3rd respondent. Hence, petitioners approached this Court in W.P.Nos.204773-781/2016 and 204817-282/2016. This Court by order dated 5 13.12.2016 Annexure-C allowed said writ petitions set aside the order of cancellation passed by 3rd respondent by reserving liberty to the competent authority to issue show cause notice to the petitioners and take action in accordance with law. Pursuant to the same, 3rd respondent issued show cause notices to the petitioners on 28.01.2017 Annexure-D series for which the petitioners are said to have submitted their replies on 08.03.2017 as per Annexure-E series, which came to be considered and by impugned orders dated 29.05.2017 as per Annexure F series.
3. Power purchase agreements entered into between the petitioners between 25.01.2016 to 03.02.2016 came to be cancelled by 3rd respondent and operative portion of said orders read as under:
Consequent to the foregoing reasons, the Power Purchase Agreement dated 03.02.2016 entered into between GESCOM and N.Amman raju S/o at Sry.No.46/2 in 6 Gudugaladinni village of Sindhanur Tq. In Raichur District hereby stands cancelled forthwith as the proposed Solar Plant is in the open land of Sry.No.46/2 in Gudugaladinni village of Sindhanur Tq. In Raichur District which does not qualify as a Solar Roof Top PV plant as stipulated in Govt.
of Karnataka Notification No.EN 21 VSC 2014, Bengaluru dated 22.05.2014.
4. Petitioners being aggrieved by the said orders had challenged the same by approaching this Court in W.P.202716-202737/2017 (GM-KEB). Respondents on being notified appeared and filed their statement of objections. It was the grievance of the petitioner that when power purchase agreements were in force i.e. during the currency of the said agreement, which was for a period of 25 years, petitioners were entitled to put up the construction for the purpose of installation of SRTPV within a period of one year as per the circular dated 10.12.2015 Annexure-H and even 7 before expiry of said period, agreements in question came to be cancelled and as such their huge investment in the project has gone the drain. Hence, they sought for quashing of the impugned orders dated 29.05.2017 Annexure-F series. It was the stand of the respondents GESCOM in their statement of objections that as per the Solar Policy 2014-2021 dated 22.05.2014 Annexure-R1, SRTP was permissible to set up for existing buildings within the prescribed capacity limit and petitioners proposal for SRTPV was on the open land and they did not even possess electricity connection and thereby it implies that there was no existing building on the land at the time of signing of power purchase agreements, which is also fortified by the report of the site inspection conducted by Teem of GESCOM officials on 13.07.2016. It was also contended that by virtue of power vested with the GESCOM under the Solar Policy 2014-21 vide Clause 20 and in pursuance to notification issued by first respondent has 8 on 17.08.2016 notifying that all ESCOM's that where Solar Panels are installed on the ground or ground mounted by constructing structures using steel / iron/wooden/concrete supports are not to be construed as Solar Roof Top PV plant power projects of petitioner came to be inspection and found some not to be in consonance with policy guidelines and as such agreements entered with petitioners has been cancelled. It was further contended that on account of the first respondent had also expressed its displeasure to all ESCOM's regarding various alleged irregularities with regard to execution of SRTPV and as such first respondent had formed various teams of its officials for field verification related to SRTPV installations and power purchase agreement signed up to 22.03.2016 and they in turn conducted field inspection and submitted the reports on 16.07.2016 upon which it came to be notice of second respondent that petitioners were not having any existing building or any electric connection 9 and the agreements entered by them with GESCOM was in direct contravention of Solar Policy and notification dated 22.05.2014 Annexure-R1 an clarification issued by Government under communication dated 17.08.2016 Annexure-R2 and circular dated 28.03.2016 Annexure-R4. On these grounds, it was contended that order of cancellation of the PPA's executed in favour of petitioners by GESCOM was just and proper and did not call for interference.
5. As could be seen from the order under challenge in these appeals liberty has been reserved to the petitioners herein to approach the Government pursuant Clause 20 of the Solar Policy 2014-21 dated 22.05.2014 Annexure-R1 seeking for amendment / review / relaxation / interpretation of the provision so as to help the petitioners to save their project which is said to have been commenced pursuant to the PPAs entered into by them with second respondent. 10
6. It is the contention of Sri. Ameet Kumar Deshpande, learned counsel appearing for the appellant that on the dates on which the petitioners entered into agreement with respondent No.2 i.e. between the date of first agreement till the last agreement which is the subject matter of these appeals or between 25.01.2016 to 03.02.2016 undisputedly solar policy of 2014-21 was in existence and by virtue of power vested under said policy 1st respondent has issued circular dated 10.12.2015 Annexure-H which provides for agreement holders to put up construction of building within one year from the date of entering into such agreements and even before completion of one year period from the date of agreement, agreements had been cancelled unilaterally and thereafter petitioners have been pursuing their grievance before the respondents as well as before this Court espousing their cause and during this period i.e. subsequent to the first cancellation 11 which was during August-2016, they could not complete the building for want of clarity and as such he would contend that respondents would not be right in contending that subsequent circular dated 28.03.2016 or notification issued or any other subsequent / notification can be made applicable to cancel agreements executed in favour of petitioners, in as much as respondent would be governed by the circulars or notifications which were in force as on the date petitioners entered into agreement and in the existing case it was 10.12.2015 (Annexure-H and R3).
7. Per contra, Sri. Ravindra Reddy, learned counsel appearing for respondent Nos.2 and 3 would submit that pursuant to the direction issued by the learned Single Judge, petitioners had submitted their requisition / representation and it has been turned down and as such petitioners would not be entitled to prosecute these writ appeals by the continuing to 12 espouse their cause. He would also further contend that even otherwise on merits prayer of petitioners came to be considered by issuance of show cause notices and by a detailed speaking order dated 29.05.2017 (Annexure-F series), PPAs executed in their favour has been cancelled and as such there is no error in the order under challenge. He would further elaborate his submissions by contending that Class-20 of the Solar Policy 2014-21 empowers the respondents to modify to amend / review / relaxation / interpret any of the provisions under the policy as and when it calls for and in furtherance of it circular dated 10.12.2015 Annexure-H which is at Annexure-R3 had been issued on 10.12.2015 Annexure-H and also Annexure-R3 and it was clarified by notification dated 27.03.2016 Annexure-R5. Hence, petitioners would not be entitled for continuance at the PPAs executed in their favour and as such he seeks for dismissing the writ appeals by 13 confirming the order passed by the learned Single Judge and also prays for dismissal of the writ petitions.
8. Having heard the learned advocates appearing for the parties, on perusal of the case papers as well as on bestowing our careful and anxious consideration to the rival contentions raised at the bar it is noticed that undisputedly respondent No.2 has entered into power purchase agreements with the petitioners between 25.01.2016 to 03.02.2016 and copies of said agreements have been produced by the petitioners as Annexure-A to A21, where under second respondent after considering the application of petitioners has agreed that the sellor namely the petitioners would install or if not already installed a SRTPV system of 450 KWp capacity on the roof top of the building. It is also agreed under the said agreement that the sellor would sell net energy export from SRTPV system to GESCOM as recorded in the bi-directional 14 meter installed in the sellor premises from the date of commencing of the SRTPV system at the rate agreed to thereunder. Pursuant to said agreements entered into by petitioners with 2nd respondent are said to have invested huge amounts for the purpose of construction and also installation of all necessary equipment's, gadgets, cells, etc. When this was the factual position as already noticed herein above. There was a unilateral cancellation of the said PPAs by the second respondent on 24.08.2015, which came to be set aside by this Court on 13.12.2016 in W.P.No.204773-781/2016 and connected matters reserving liberty to the respondent No.2 to issue show cause notices to petitioners and to take action in accordance with law. It is pursuant to same, impugned orders have been passed by canceling the PPAs after issuing notices to petitioners and taking into consideration replies filed by them. 15
9. First respondent as per the extant Solar Policy 2014 had issued a circular on 10.12.2015 specifying the mode method in which the PPAs are to be operated by GESCOM. One of the condition stipulated under said circular which has a direct bearing and impact in the instant case would be Clause-5 which would indicate that on execution of the agreement i.e. PPAs, within one year construction of the buildings should be completed and electricity connection is to be obtained as otherwise the electricity charges for the such building would be fixed as per the existing tariff prescribed by the Karnataka Electricity Regulatory Commission. Clause-5 reads as under:
"F PÀgÁgÀÄ ¥ÀvÀæzÀ CªÀ¢üAiÀÄÄ MAzÀÄ ªÀµÀðPÉÌ ¹Ã«ÄvÀªÁVzÀÄÝ, MAzÀÄ ªÀµÀðzÀ CªÀ¢Aü iÉƼÀUÉ PÀlÖqÀ ¤ªÀiÁðt ¥ÀÇtðUÉÄÁAqÀÄ «zÀÄåvï ¸ÀA¥ÀPÀð ¥ÀqÉ¢gÀ¨ÉÃPÀÄ. E®èªÁzÀ°è C£ÀAvÀgÀ ZÁ°ÛAiÀÄ°ègÀĪÀ PÀ£ÁðlPÀ «zÀÄåZÀÒQÛ ¤AiÀÄAvÀæt DAiÉÆÃUÀzÀªÀgÀ ¤UÀ¢vü À «zÀÄåvï zÀgÀªÀ£ÀÄß ¤UÀ¢ü¥Àr¸À¯ÁUÀĪÀÅzÀÄ."16
10. As could be seen from the impugned order of canceling the PPAs namely order dated 29.05.2017 Annexure-F series, the thrust or the emphasis laid cancellation of PPA's was on the ground that buildings are not in existence; petitioners are attempting to put up SRTPV in open land and the extant Solar Policy 2014-20 would stipulate setting up of SRTPV only on the roof top of the buildings; said policy provides for twin utility namely captive consumption and exchange of power with the user which would be decided based on the total energy requirement of the premises; and usable area available for installation of roof top of SRTPV and this being the tenor of the policy had been given a go-bye and PPAs holders who have proposed to set up SRTPV in the open land are trying to sell the maximum or whole of the quantum of power so generated with a sole intention to make undue profits. In sum and subsistence it came to be held under the 17 impugned orders that there is no roof top existing for installation of SRTPV.
11. When the circular dated 10.12.2015 Annexure-H enables the PPAs holders namely petitioners herein to put up construction within one year from the date on which they have entered into agreements, it cannot be gain said by the respondents that for want of roof tops or in other words there being no constructed building in existence to install SRTPV and as such PPAs are to be cancelled, that too, by relying on the circular dated 28.03.2016 - Annexure-R5 which has come into existence subsequent to PPAs entered into between petitioners and 2nd respondents and also relying upon circular dated 22.03.2016 Annexure-R4 where under circular dated 10.12.2015 Annexure-H came to be withdrawn.
12. There cannot be any dispute with regard to the power available to first respondent or respondents 18 Nos.2 and 3 to amend review or relax or interpret any of the provisions under the policy as and when it is required. However, when a contract is entered into between the parties and existing circular, notification having been made applicable or acted upon, it cannot be gain said by any party to such agreement that on account of further change in the policy the acts done up to the said date would be wiped out or the respondents would be entitled to seek for all such acts being done under the agreements are requested to be overlooked. First respondent as well as respondent Nos.2 and 3 being an instrumentality of State are required to act in just and fair manner and after having commenced the play, they would not be entitled to change the goal post or alter the rules of the game. Even assuming such power to change or modify is available it can be made applicable only prospectively and not retrospectively particularly when the rights of the parties have got crystallized by virtue of contract having been entered 19 into which was based on existing circulars or notifications. Keeping this sound and salutary principles in mind when facts on hand for examined it would clearly indicate that respective PPAs having been entered into between petitioners as well as respondent No.3 and on the dates on which said agreements came to be entered into circular dated 10.12.2015 Annexure-H and Annexure-R3 was undisputedly in operation and there is no dispute to this fact. Said circular at the cost of repetition requires to be noticed and it would indicate that agreement holders were entitled to put up construction within one year from the date they entered into such agreements. In fact, this view is also fortified by the very expression used in the agreement itself namely Clause-B where under it is agreed.
"The seller intends to install / has installed a SRTVP system of 450 KWp capacity on the roof top of the premises"20
(Explains supplied by me) In other words respondent No.3 was very well aware that either the agreement holder namely the petitioners or possessing or having a building already with a roof top or they would be entitled to put up such building for the purposes of installation of SRTPV. It is in this background the expression "intends to install" have been expressly used under the contract and when this expression read in conjunction with the circular dated 10.12.2015 Annexure-H, it leaves no iota of doubt in the mind of this court about agreement holders being entitled to put up construction within a period of one year from the date of entering into such agreement".
13. As already noticed herein above, even before ink on the agreements in question could dry, 3rd respondent in haste had cancelled the agreements at the first instance on 24.08.2016 and subsequently on 21 29.05.2017 which would not stand the test of law for the myriad reasons assigned by us herein above.
14. Thus, consequential question which would arise for consideration would be, what should be the time that requires to be granted to the petitioners to complete the construction if not already completed under the agreements in question which came to be entered between 25.01.2016 to 03.02.2016. It is not in serious dispute that at the first existence PPA's were cancelled on 24.08.2016 and subsequently on 29.05.2017. Writ petitions in question which came to be filed during June-2017 was pending before this Court up to 21.03.2008 i.e., till it came to be disposed of by reserving liberty to the petitioners to approach 1st respondent Government which the petitioners have done. However, the right of the petitioners which had already crystallized under the PPAs has remained intact particularly on account of huge investment having been 22 made by the petitioners. Hence, they cannot be left in the lurch or directed to workout their remedies in a Civil suit. Particularly when extant Solar Policy 2014 envisages power generation. It also requires to be noticed at the cost of repetition that main grievance of the respondent for cancellation of PPAs was on the ground that buildings where they propose to install SRTPV. If it is so, this Court will have the balance equities between parties and as such it would just and equitable to direct the respondent Nos.2 and 3 to permit the petitioners to complete the construction preferably within a outer limit of six months and thereafter they would beat liberty to carry out inspection and examine as to whether petitioners would meet conditions prescribed and agreed to under the subject agreements and then proceed further. It is made clear that in the event of respondents not meeting reutilities respondent Nos.2 and 3 would be at liberty to reject the claim of petitioners or cancel the agreements after 23 necessarily issuing notice, calling for their explanation and adjudicating it by a reasoned order which shall also be communicate to petitioners.
15. In the light of aforestated discussion, we proceed to pass the following...
ORDER
(i) Writ Appeals are hereby allowed.
(ii) W.P.Nos.202716-202737/2017 (GM-KEB) are
hereby allowed and order dated 29.5.2017- Annexure -F passed by 3rd respondent in file No:
GESCOM/SND/EEE/AEE(O)/AET/2017-18/1820-27, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1828-35, GESCOM/SND/EEE/AEE(O)/AET/2017-18/2498-2505, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1724-31, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1732-39, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1668-75, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1676-83, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1684-91, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1692-99, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1740-47, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1748-55, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1772-79, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1796-03, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1788-95, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1780-87, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1804-11, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1812-19, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1700-07, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1716-23, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1708-15, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1756-63, GESCOM/SND/EEE/AEE(O)/AET/2017-18/1764-71, are hereby quashed.24
(iii) Order dated 21.03.2018 passed in W.P.No.202716-202737/2017 (GM-KEB) is hereby set aside and it is ordered that respondent Nos.2 and 3 shall grant the petitioners preferably six months time to complete the construction of buildings and then carry out inspection and examine as to whether petitioners would meet the conditions prescribed and agreed to under the subject agreements and if so to proceed further, and if not, respondents would be at liberty to reject the claim of petitioners or cancelled the agreements after necessarily issuing notice, calling for their explanation and adjudicating it by a reasoned order which shall also be communicated to petitioners.
(iv) Respondent Nos.2 and 3 would at liberty to intimate the petitioners by issuing notice, the date on which the construction of the buildings shall be completed and within the said period if the petitioners were to complete the construction if not already completed respondent Nos.2 and 3 would be 25 at liberty to proceed further as observed herein above.
(v) All contentions of both parties are kept open.
Respondents would at liberty to examine the feasibility of continuing the agreement taking into consideration all technical aspects as envisaged under the Solar Policy 2014-21 and with reference to the circulars, notifications, government orders which were in existence as on the date agreement in question came to be executed while examining the plea of petitioners if the respondents claim fit to cancel the PPs after issuing notice to petitioners as obtained herein above.
Sd/-
JUDGE Sd/-
JUDGE SMP