Karnataka High Court
M/S Esd Builders And Developers Pvt.Ltd vs The State Of Karnataka on 18 September, 2017
Author: Vineet Kothari
Bench: Vineet Kothari
1/14
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF SEPTEMBER, 2017
BEFORE
THE HON'BLE DR JUSTICE VINEET KOTHARI
WRIT PETITION NO.56799/2014 (GM-KEB)
Between
M/s. ESD Builders & Developers Pvt. Ltd.,
No.450/1/14, 5th Floor, Lakshmi Complex
27th Cross, 10th Main, 4th Block
Jayanagar, Bengaluru-560011
Represented by its authorized signatory
D.V. Venkatachalapathi.
... Petitioner
(By Mr. B.B. Patil, Advocate)
And
1. The State of Karnataka
Represented by its Secretary
Ministry of Energy
Vidhana Soudha
Bangalore-560001.
2. The Karnataka Renewable Energy
Development Limited (KREDL)
No.39, Shanthigruha
Bharat Scouts and Guides Building
Palace Road, Bangalore-560001
Represented by its
Managing Director.
3. Bangalore Electricity Supply Company (BESCOM)
K.R. Circle, Cubbon Park Road
Bangalore-560001
Date of Order 18-09-2017 W.P.No.56779/2014
M/s. ESD Builders & Developers Pvt. Ltd., Vs.
The State of Karnataka & others
2/14
Represented by its
Managing Director.
... Respondents
(By Mr. A.M. Suresh Reddy, AGA for R1
Mr. G.S. Kannur, Advocate for R2
Mr. G.C. Shanmukha, Advocate for R3)
****
This Writ Petition is filed under Articles 226 and 227 of the
Constitution of India, praying to issue a writ of Certiorari or any
other appropriate writ, quashing the communication dated
17.11.2014, No.GM(Ele)/PP/BESCOM//DGM-1/AGM-1/BC-39/F-
PPA-2299(C)/13-14/7330-31, at Annexure-R to the writ petition,
issued by respondent No.3 & etc.
This Writ Petition coming on for Orders this day, the Court
made the following:
ORDER
Mr. B.B. Patil Advocate For Petitioner Mr. A.M. Suresh Reddy, AGA For R1 Mr. G.S. Kannur, Advocate for R2 Mr. G.C. Shanmukha, Advocate for R3
1. The controversy involved in the present case is squarely covered by a decision rendered by this Court on 17/07/2017 in Writ Petition No.41854/2016 (Sri. S.A. Prasanna Kumar Vs. The State of Karnataka and others). It is in the following terms:
Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 3/14 "1. The petitioner - Sri. S.A. Prasanna Kumar has filed this writ petition with the following prayers:-
"(a) Issue a writ in the nature of mandamus directing respondent Nos. 3 and 4 to consider the representations given by the petitioner dated 23.05.2016, 27.05.2016 and 09.06.2016 as per Annexures-H, J and K and further direct the respondents to extend the time to complete and operate the project as accepted under the proposal accepted by the petitioner and respondent Nos. 3 and 4 in Form No.2 dated 19.01.2016 as per Annexure-
E.
(b) Pass any appropriate writ, order or direction as this Hon'ble Court deem it fit and proper in the facts and circumstances of the case and allow this Writ Petition with costs, in the ends of justice and equity.
(c) Issue a writ in the nature of certiorari to quash the Official Memorandum dated 09.08.2016 issued by the 4th respondent in No.Ka.Ni,E(Vi)Sa.E.(Tam)/Man.Vi/2016- 17/2054-57 as per Annexure-N1 and also the covering letter dated 09.08.2016 issued by the 4th respondent in Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 4/14 No.Ka.Ni.E(Vi)Sa.E.(Tam)/Man.Vi/2016- 17/2051-53 as per Annexure-N;
(d) Consequently further direct respondent Nos.2 and 3 to extend the time in the light of the time extended in favour of Sriyuths Rudrappa, Thammanna and Vishnu Ramachandra Naik as per Annesures-P, P1 and P2 respectively."
2. Since, the time limit for completion of the project in question namely "Solar Rooftop PV Systems (SRTPV)" was curtailed by the respondent - Karnataka Electricity Regulatory Commission (KERC) from 18.01.2017 to 08.08.2016, the petitioner prefers the present writ petition.
3. This Court by Interim Order passed in favour of the petitioner on 09.11.2016 had extended the time for the petitioner to complete the said project upto 18.01.2017 with a clear direction on page 4 of the order that no further extension of time shall be granted by this Court. The said Interim Order dated 09.11.2016 is quoted below for ready reference:-
"Heard the learned counsels for Admission and interim relief.
Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 5/14 The learned counsel for the petitioner has urged before this Court that the Power Purchase Agreement initially entered into with the Respondent No.4 - M/s. Chamundeshwari Electricity Supply Company vide Annexure E dated 19/01/2016 and Annexure F dated 09/02/2016 gave him the period upto 18/01/2017 to establish and install the Solar Energy Power Generating Equipment and Plant and start the supply of the power at the tarriff rate fixed at Rs.9.56 per unit in the said Agreements. The said agreements with ESCOM required an approval of the second respondent - Karnataka Electricity Regulatory Commission ('KERC' for short), which, however vide Annexure G communication dated 12/05/2016, curtailed the period of installation from 18/01/2017 to 08/08/2016 without any valid rhyme or reason and without giving any opportunity of hearing to the petitioner and consequently the respondent No.4, Chamundeshwari Electricity Supply Company passed the impugned order Annexure N dated 09/08/2016, cancelling the said Power Purchase Agreement, Annexure E dated 19/01/2016, unilaterally, on the ground that the installation and commencement of power generation could not take place before 08/08/2016 and in these circumstances, the petitioner has approached this Court.
Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 6/14 The learned counsel for the respondents relied upon the powers conferring upon the KERC under Section 86 (1)(b) of the Electricity Act, 2003, empowering KERC to regulate electricity purchase and procurement process of distribution licencees including the price at which electricity shall be procured from the generating Companies like the petitioner.
However, there appears to be no specific power with the KERC to curtail the period given upto 18/01/2017.
The learned counsel for the respondents were unable to satisfy this Court that they have any valid and good reason for passing the impugned orders.. The period of commencement of power generation by the petitioner has been curtailed from 18-01-2017 to 08-08-2016. No reasons have been assigned in the impugned communication Annexure G of KERC nor the respondent No.2 - KERC had afforded any opportunity of hearing to the petitioner before passing such orders curtailing the period for establishment of such Power Generating Unit by the petitioner.
The Statement of Objections have been filed by the respondents.
The matter would require further consideration by this Court.
Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 7/14 Hence, Admit.
Fresh notice need not be issued as parties are served.
Heard for interim relief also.
In the facts and circumstances of the case, the operation of the impugned order Annexure G of KERC dated 12/05/2016 and Annexure N and N1 dated 09/08/2016 of the Respondent No.4 M/s. Chamundeshwari Electricity Supply Company shall remain stayed and the petitioner is permitted to continue with the process of setting up of the Power Generating Unit before the cut-off date as given in the agreement, Annexure E as 18/01/2017 and report the same to this Court. It is made clear that no extension of time shall be granted by the Court.
The learned counsel for the petitioner upon instruction, undertook before the Court that the petitioner would complete the process of setting up of the Solar Power Generating Unit in question before 18/01/2017, the date given in the agreement Annexure E. Mr.S.A. Prasanna Kumar, the petitioner is present before the Court. Let his Affidavit to the aforesaid effect be filed in this Court on 10/11/2016. If such undertaking/Affidavit is not filed by tomorrow, the stay application filed by the petitioner shall be treated Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 8/14 as dismissed and the writ petition itself may be listed for final hearing in January, 2017 on 25.1.2017.
Put up tomorrow on 10/11/2016."
4. The respondents took the matter before the Division Bench by way of Writ Appeal Nos.5000-5001/2016 (M/s. Chamundeshwari Electricity Supply Company Limited and another vs. Sri. S.A. Prasanna Kumar and others) and the Hon'ble Division Bench by its order dated 14.03.2017 allowed the appeal of the respondents and set aside the aforesaid order passed by the Single Judge on 09.11.2016 with the following observations:-
"Issue notice to the respondents.
Mr.M.R.Rajagopal, learned advocate, accepts notice for the respondent No.1.
Mr.V.Sreenidhi, learned additional government advocate, accepts notice for the respondent No.2. Mr. Mayanna B.L., learned advocate, appears for Mr.T.S.Amar Kumar, learned advocate and accepts notice for the respondent No.3. He submits that Mr.T.S. Amar Kumar, learned advocate shall be filing vakalathnama for the respondent No.3.
Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 9/14 Therefore, the appeals become ready as regards service by appearance.
2. By consent of the learned advocates appearing for the parties, the appeals are taken up for final hearing.
3. These are appeals challenging the interim order dated November 9, 2016, passed by the Hon'ble Single Judge in Writ Petition No.41854 of 2016.
4. We find substance in the argument of Mr.S.S.Naganand, learned senior advocate appearing for the appellants that, virtually, the final relief has been granted by way of an interim order.
5. The writ petitioner challenged an order passed by the appellants, canceling an agreement, in terms of the directions passed by the Karnataka Electricity Regulatory Commissioner. The Regulatory Commission exercised its power under Section 86 of the Electricity Act, 2003, and modified the terms of the agreement entered into by the appellants and the respondent No.1.
6. Whether the Regulatory Commission possesses such power, is the issue in the writ petition. Therefore, we are of the opinion that the Hon'ble Single Judge was not right in passing the impugned interim order and in Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 10/14 directing the writ petitioner to complete the process of setting up of the solar power generating unit before January 18, 2017, when the Commission has fixed the time limit as August 8, 2016.
7. Therefore, the order impugned is set aside with a request to the Hon'ble Single Judge to dispose of the writ petition, as expeditiously as possible, uninfluenced by His Lordship's observations in the order impugned.
8. We, however, express no opinion on the merits of the case. All points are kept open.
9. The writ appeals stand allowed.
10. In view of disposal of the writ appeals, the pending interlocutory application does not survive for consideration and is, also, disposed of.
11. We make no order as to costs."
5. The petitioner has therefore approached this Court again for final disposal of the matter.
6. At this stage, the learned counsel for the petitioner Mr.Rajagopal M.R. urged before this Court that in pursuance of the Interim Order passed Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 11/14 by this Court on 09.11.2016, the petitioner approached the respondent Chamundeshwari Electricity Supply Company to issue the requested Work Order in Format 6, so that it could complete the said project work before extended time on 18.01.2017. However, since the respondent said that they have filed the Intra Court appeal before Division Bench before this Court, they did not issue the Format 6 Writ Order to the petitioner.
7. Learned counsel for the petitioner therefore urged that the time now deserves to be extended further for completion of that work.
8. These contentions are refuted by the learned counsel for the respondents, who have drawn the attention of the Court towards the power of the regulatory Commission to regulate the electricity purchase and procurement process under Section 86 (1) (b) of the Electricity Act, 2003 which is quoted below for the reference:-
"regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 12/14 agreements for purchase of power for distribution and supply within the State."
9. Learned counsel for the respondents have submitted that notwithstanding the fact that the direction of this Court extending the time up to 18.01.2017 for completion of the said project having been set aside by the Division Bench of this Court, even for argument sake, the petitioner has not been able to complete the project, even up to 18.01.2017 and the respondents have produced before this Court the site photographs as on 09.02.2017 showing only the incomplete work undertaken by petitioner so far at the site in question.
10. Learned counsel for the respondents explained before the Court that on account of Tariff variations, if the project of Solar energy is not completed by the given date, the respondents Distribution companies like BESCOM cannot be expected to pay higher Tariff earlier agreed in the Power Purchase Agreements (PPAs), if the projects are delayed and in the course of time, the tariff Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 13/14 rates go down, as it has happened in the present case.
11. Having heard the learned counsels for the parties, this Court is satisfied that there is no merit in the present writ petition and the power of the respondent Electricity Regulatory Commission to regulate the said power purchase agreements including the aspects relating to time given for completion of such projects cannot be questioned. Section 86 (1) (b) of the Act clearly empowers them to do so. The directions of this Court in the order dated 09.11.2016 obviously could not enure to the benefit of the petitioner, as the respondents approached the Division Bench of this Court which was pleased to set aside the said interim direction. Therefore, the said direction could not be construed as extending the time period for the petitioner to complete the said project. Be that as it may, the petitioner apparently was unable to complete the said project even upto 18.01.2017, what to talk of completion before curtailed period upto 08.08.2016 The reason assigned by the petitioner that the work order in Format 6 was not given by the respondents to them, cannot be a reason to Date of Order 18-09-2017 W.P.No.56779/2014 M/s. ESD Builders & Developers Pvt. Ltd., Vs. The State of Karnataka & others 14/14 further extend the time for completion of such project.
12. The need to observe the time line and the period within which such project has to be completed to secure the benefit of an agreed tariff from the Distribution companies, who have agreed to purchase such Solar Energy from the projects like that of the petitioner, cannot be over emphasized. The impugned action of the respondents therefore cannot be successfully assailed by the petitioner and Writ Petition therefore is liable to be dismissed and same is accordingly dismissed. No costs."
2. In view of the above, the present petition is accordingly dismissed in the same terms.
Sd/-
JUDGE BMV*