Supreme Court - Daily Orders
M/S Adani Power Ltd vs Central Electricity Regulatory ... on 31 March, 2015
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10016 OF 2014
Adani Power Limited ...Appellant
Versus
Central Electricity Regulatory Commission …Respondent
JUDGMENT
Chelameswar, J.
1. This is an appeal under Section 125 of the Electricity Act, 2003 (hereinafter referred to as “the Act”) arising out of an order dated 31.10.2014 in I.A. No.380 of 2014 in DFR No.2355 of 2014 of the Appellate Tribunal for Electricity, Delhi (hereinafter referred to as “the Appellate Tribunal”), constituted under Section 110 of the Act.
2. By the impugned order, the Appellate Tribunal declined to condone the delay of 481 days in preferring an appeal against the order dated 02.04.2013 of the Central Electricity Regulatory Signature Not Verified Commission (hereinafter referred to as the “Central Commission”) Digitally signed by Deepak Mansukhani Date: 2015.03.31 14:52:13 IST Reason: constituted under Section 76 of the Act.
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3. The facts giving rise to this appeal are as follows:
The appellant M/s. Adani Power Limited is a subsidiary company of M/s. Adani Enterprises Limited. The appellant has established a power generating station with a total capacity of 4620 MW in the Special Economic Zone at Mundra in the State of Gujarat.
The appellant entered into two Power Purchase Agreements (for short “PPA”) dated 02.02.2007 and 06.02.2007 by which the appellant agreed to supply 2x1000 MW power to Gujarat Urja Vikas Nigam Limited, respondent No.4 herein. By another PPA dated 07.08.2008, the appellant agreed to supply 1424 MW power to Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited, respondent Nos.2 & 3 herein.
4. The appellant filed a petition No.155/MP/2012 under Section 79 of the Act before the Central Commission with prayers as follows:
“a) to evolve a mechanism to restore the Applicant to the same economic condition prior to occurrence of Subsequent Events mentioned in respective Part I & II hereinabove by adjudicating the disputes between the Applicant and the Respondent(s) in relation to regulate including changing and/or revising the price/tariff under PPAs dated 7.8.2008 with UHBVNL and DHBVNL and 2.2.2007 with GUVNL;
b) in the alternative, to declare that the Applicant is discharged from the performance of the PPAs on account of frustration of the PPAs due to Subsequent Events in respective Part I & II;
c) this Hon’ble Central Commission be pleased to declare that the revised tariff shall be applicable from the Scheduled Commercial Operation Date (SCoD) of the PPAs;2
d) that during the pendency of the present Application Hon’ble Central Commission may direct the Respondent(s) to procure power on the cost plus basis, alternatively, the Hon’ble Central Commission may suspend the operation of the PPAs till the final disposal of the Application;
e) pass such further or other orders as the Hon’ble Central Commission may deem just and proper in the circumstances of the case.”
5. The substance of the petition is that due to various reasons stated by the appellant in its petition, the appellant will not be able to supply power to respondents No.2 to 4 at the rates agreed between the appellant and those respondents by the abovementioned PPAs. Therefore, the appellant sought the abovementioned reliefs.
6. The appellant submitted before the Central Commission that he is entitled for the various reliefs on three distinct grounds, they are:— “1. That the subsequent events qualify as Force Majeure as per Article 12 of the PPAs, therefore, the contracts are frustrated;
2. That the subsequent events tantamount to change of law as contemplated under Article 13 of the PPAs, therefore, the appellant is relieved of its obligation to perform the contracts; and
3. That the Central Commission has power to grant appropriate relief to the appellant in exercise of its regulatory powers under Section 79 of the Act by making necessary modifications in the terms of the PPAs.
7. By order dated 02.04.2013, the Central Commission rejected the first two of the abovementioned submissions and accepted the third 3 submission giving certain directions for the constitution of a Committee for working out and recommending the compensatory tariff and to submit a report to the Commission by 30.04.2013 1. The order was admittedly received by the appellant on 08.04.2013.
8. Aggrieved by the said order, respondents No.2 and 3 herein preferred Appeal No.100 of 2013 before the Appellate Tribunal alongwith an application to permit them to participate in the proceedings of the above-mentioned Committee without prejudice to their contentions in the appeal.
9. On 16.09.2013, the Committee submitted its report before the Central Commission. Eventually the Central Commission passed an order dated 21.02.2014 quantifying the compensatory tariff.
10. The appeal filed by respondents No. 2 and 3, underwent a 1 Para 89. Accordingly, we direct the petitioner and the respondents and the respective State Governments to constitute a committee within one week from the date of this order. The committee shall consist of the Principal Secretary (Power), Govt. of Haryana/Managing Directors of UHBVNL and DHBVNL, the Chairman of Adani Power Ltd. or his nominee, an independent financial analyst of repute and an eminent banker of the commensurate level. The nominees of financial analysts and banker should be selected on mutual consent basis. The Committee shall go into the impact of the price escalation of the Indonesian coal on the project viability and obtain all the actual data required with due authentication from independent auditors to ascertain the cost of import of coal from Indonesia and suggest a package for compensatory tariff which can be allowed to the Petitioner over and above the tariff in the PPAs. The Committee shall keep in view inter-alia the following considerations while working out and recommending the compensatory tariff applicable upto a certain period:
(a) The net profit less Govt. taxes and cess etc. earned by the petitioner’s company from the coal mines in Indonesia on account of the bench mark price due to Indonesian Regulation corresponding to the quantity of the coal being supplied to the Mundra Power Project should be factored to pass on the same in full to the beneficiaries in the compensatory tariff.
(b) The possibility of sharing the revenue due to sale of power beyond the target availability of Mundra Power Project to the third parties may be explored.
(c) The possibility of using coal with a low GCV for generation of electricity for supply to the respondents without affecting the operational efficiency of the generating stations.
Para 90. The Committee is also at liberty to suggest any further measures which would be practicable and commercially sensible to address the situation. The Committee shall submit its report to the Commission by 30 th April 2013 for consideration and for further directions. 4 number of adjournments and is still pending.
11. On 17.04.2014, the appellant herein filed cross-objections in the abovementioned appeal No.100 of 2013 challenging that part of the order dated 02.04.2013 of the Central Commission by which the Commission declined to accept the pleas of the appellant on the grounds of “force majeure” and “change of law”.
12. On 22.04.2014, respondents No.2 and 3 preferred Appeal No.98 of 2014 challenging the correctness of the Order dated 21.02.2014 of the Central Commission. Respondent No.4 also preferred appeal No. 116 of 2014 aggrieved by the Order dated 21.02.2014
13. By Order dated 01.08.2014, the Appellate Tribunal dismissed the cross-objections of the appellant herein as not maintainable. On 16.09.2014, the appellant preferred Appeal No.DFR No. 2355 of 2014 before the Appellate Tribunal against that part of the order dated 02.04.2013 which went against the appellant. Obviously, there was a delay in preferring that appeal. Therefore, the appellant filed an application bearing IA No.380 of 2014 seeking condonation of delay in preferring the appeal which was rejected by the impugned order. Hence, the instant appeal.
14. The issue before this Court is limited. It is the correctness of 5 the decision of the appellate Tribunal in declining to condone the delay in preferring the appeal against order dated 2.4.2013 of the Central Commission.
15. However, elaborate submissions were made regarding the scope of Order XLI Rule 22 of the Code of Civil Procedure, 1908 (for short “CPC”), its applicability to an appeal under Section 111 of the Act by the appellant relying upon earlier decisions of this Court. Respondents submitted that such an enquiry is wholly uncalled for as the cross-objections of the appellant in Appeal No. 100 of 2013 stood rejected and became final.
16. Lastly, learned counsel for the appellant submitted that even if this Court comes to the conclusion that the appellant has not made out a case for condonation of delay in preferring an appeal against the order dated 2.4.2013 of the Central Commission, the appellant is entitled to argue in the pending appeals No. 98 and 116 of 2014 both the grounds of “force majeure” and “change of law” not for the purpose of seeking the relief of a declaration of the frustration of the contracts between the appellants and the respondents thereby relieving the appellant of his obligations arising out of the contracts, but only for the purpose of seeking the alternative relief of compensatory tariff. In other words, the appellant’s submission is 6 that the facts which formed the basis of the submission of the ‘frustration of contracts’ are also relevant for supporting the conclusion of the National Commission that the appellant is entitled for the relief of compensatory tariff.
17. We agree with the respondents that we are not required to go into the question of the applicability of Order XLI Rule 22 in the instant appeal as the decision of the appellate Tribunal to reject the cross-objections of the appellant by its Order dated 01.8.2014 has become final and no appeal against the said order is pending before us.
18. We are also not required to go into the question whether the order of the Central Commission dated 02.4.2013 by which it declined to grant a declaration of frustration of the contracts either on the ground of “force majeure” or on the ground of “change of law” is independently appealable, since no such appeal even if maintainable, is preferred by the appellant.
19. The question whether the appellant made out a case for condonation of delay in preferring the appeal before the Appellate Tribunal, in our opinion, need not also be examined by us in view of the last submission made by the appellant. If the appellant is not 7 desirous of seeking a declaration that the appellant is relieved of the obligation to perform the contracts in question, the correctness of the decision of the Appellate Tribunal in rejecting the application to condone the delay in preferring the appeal would become purely academic. We are of the opinion that so long as the appellant does not seek a declaration, such as the one mentioned above, the appellant is entitled to argue any proposition of law, be it “force majeure” or “change of law” in support of the order dated 21.02.2014 quantifying the compensatory tariff, the correctness of which is under challenge before the Appellate Tribunal in Appeal No.98 of 2014 and Appeal No.116 of 2014 preferred by the respondents, so long as such an argument is based on the facts which are already pleaded before the Central Commission.
20. The appeal is accordingly disposed of, with no order as to costs.
….………………………….J. (J. Chelameswar) …….……………………….J. (R.K. Agrawal) New Delhi;
March 31, 2015
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ITEM NO.1A COURT NO.4 SECTION XVII
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 10016/2014
M/S ADANI POWER LTD Appellant(s)
VERSUS
CENTRAL ELECTRICITY REGULATORY COMMISSION & ORS. Respondent(s)
Date : 31/03/2015 This appeal was called on for pronouncement of judgment today.
For Appellant(s) Mr. Amit Kapur, Adv.
Ms. Poonam Verma, Adv.
Mr. K. Singh Nagra, Adv.
Mr. Pranav Vyas, Adv.
Mr. Gaurav Dudeja, Adv.
Mr. Arpan Behl, Adv.
Mr. Harish Pandey,Adv.
For Respondent(s) Mr. Prashant Bhushan,Adv.
Mr. Kumar Mihir,Adv.
Ms. Jesal, Adv.
for Ms. Hemantika Wahi,Adv.
Mr. K. V. Mohan,Adv.
Mr. Nikhil Nayyar,Adv.
Hon'ble Mr. Justice J. Chelameswar pronounced the judgment of the Bench comprising of His Lordship and Hon'ble Mr. Justice R.K. Agrawal.
The appeal is disposed of, with no order as to costs in terms of the signed non-reportable judgment.
(DEEPAK MANSUKHANI) (INDU BALA KAPUR) COURT MASTER COURT MASTER
(Signed non-reportable judgment is placed on the file) 9