Delhi High Court - Orders
Continuum Power Trading (Tn) Private ... vs Solar Energy Corporation Of India ... on 5 October, 2023
Author: Dinesh Kumar Sharma
Bench: Dinesh Kumar Sharma
$~31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 325/2023
CONTINUUM POWER TRADING (TN) PRIVATE LIMITED
..... Petitioner
Through: Mr. Sandeep Sethi, Sr. Adv. wwith
Mr. Samiron B., Ms. Kritika
Angirish, Mr. Ikshvaaku Marwah,
Ms. Riya Kumar, Advs.
versus
SOLAR ENERGY CORPORATION OF INDIA LIMITED
..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
ORDER
% 05.10.2023
I.A.s 19460-61/2023
1. Exemption allowed subject to all just exceptions.
2. Applications stand disposed of.
O.M.P.(I) (COMM.) 325/2023
3. The present petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking urgent ad-interim/ interim relief.
4. Learned senior counsel for the petitioner submits that initially an agreement for power purchase agreement was entered between the parties on 04.09.2018 which was later amended vide letter dated 01.04.2021.
5. Learned senior counsel submits that this PPA was for procurement of 250 MW wind power for a long term basis between the petitioner and This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14 the respondent and was amended by subsequent agreement on 01.04.2021.
6. Learned senior counsel submits that the relevant amended condition is contained in Para-4.6.2 which is as under:
"In case the commissioning of the project is delayed over Six (6) months beyond the Scheduled Commissioning Date, the pre-
fixed tariff as per Article 9.1 shall be reduced at the rate of 0.15 paise/kWh per day of delay for the delay in such remaining capacity which is not commissioned. The encashment of Performance Bank Guarantee and reduction in the fixed tariff shall be maximum time period allowed for commissioning of the full Project Capacity with limited to 09 months from the Schedule Commissioning Date. In case, the Commissioning of the Project is delayed beyond 09 months from the Schedule Commissioning Date, the PPA capacity shall stand reduced/ amended to the Project Capacity Commissioned, provided that the commissioned capacity is not below 50 MW or 50% of the allocated Project Capacity. whichever is higher, and the PPA for the balance Capacity will stand terminated and shall be reduced from the selected Project Capacity."
7. Learned senior counsel submits that the scheduled date of commission was 30.06.2022 which was extended by a period of six months taking it to 30.03.2023. However, the petitioner for reasons beyond his control could only establish the plant with the capacity of production of 88 MW project and therefore respondent vide communication dated 14.04.2023. taking into account clause 4.6.2 of the PPA (including its amendment) communicated which reads as under:
"Quote "In case the commissioning of the Project is delayed over six (6) months beyond the Scheduled Commissioning Date, the pre-fixed tariff as per Article 9.1 shall be reduced at the rate of 0.15 paise/kWh per day of delay for the delay in such remaining capacity which is not commissioned. The This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14 maximum time period allowed for commissioning of the full Project Capacity with encashment of Performance Bank Guarantee and reduction in the fixed tariff shall be limited to 09 months from the Scheduled Commissioning Date. In case, the Commissioning of the Project is delayed beyond 09 months from the Scheduled Commissioning Date, the PPA capacity shall stand reduced/ amended to the Project Capacity commissioned, provided that the commissioned capacity is not below 50 MW or 50% of the allocated Project Capacity, whichever is higher, and the PPA for the balance Capacity will stand terminated and shall be reduced from the selected Project Capacity." Unquote As on date the above criteria are not met as only 88MW out of 250 MW had commissioned which was accepted by SECI as the part commissioning was allowed and in anticipation of fulfilling the RFS condition by SCD/LSD by the WPD thus the same stands terminated. In such a scenario SECI cannot recognize/offtake power from such partially commissioned capacity as on date under this PPA and WPD may take appropriate steps w.r.t. scheduling of this power on its own.
For considering the commissioned capacity (i.e. 88 MW) upto long stop date, SECI will take up the matter with MNRE and MNRE's decision on acceptance or termination of the commissioned project capacity (ie. 88 MW) shall be binding on M/s CPTTNPL.
In case of acceptance of 88MW capacity by MNRE, this NOC issued will stand withdrawn by SECI and M/s CPTTNPL shall be allowed to schedule the power under this PPA.
This is issued "Without Prejudice" to terms and conditions of the RfS and PPA."
8. Sh. Sandeep Sethi, learned senior counsel submits that pursuant to this communication dated 14.04.2023 the petitioner paid the liquified This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14 damages as claimed by the petitioner total in the sum of Rs. 30.12 crores and the same was duly accepted by the petitioner. However, learned counsel submits that suddenly on 27.09.2023 the petitioner received the communication from the respondent wherein they admitted that they have already recovered liquefied damages for 38 MW capacity. However, it was stated that due to the revised scheduled commissioning date, the six-month period post SCD will be revised to 19.06.2023 and tariff reduction period will be revised to 17.09.2023, and accordingly, LD will be recalculated and levied till the date of self- commissioning of 2 MW and 36 MW capacity by WPD.
9. Sh. Sandeep Sethi, learned senior counsel submits that the respondent further stated that since the 38 MW capacity is considered by SECI, there will be no implication of Article 4.6.2 of the PPA on the WPD as the requirement of the minimum 50% or higher capacity (i.e. 125 MW in this case) is met by the WPD. Therefore, there is no deviation in the PPA/RFS terms in this regard, thus, 88 MW capacity is hereby restored with immediate effect.
10. Learned senior counsel further submits that the respondent vide this communication withdrew the NOC issued by SECI vide letter dated 14.04.2023 and reinstated the PPA for 126 MW and made it operationalized with effect from 28.09.2023.
11. Learned senior counsel submitted that this letter is totally in violation of the earlier communication dated 14.04.2023.
12. Learned senior counsel submits that in view of the letter dated 14.04.2023 petitioner had started supplying the power to other customers and in view of communication dated 28.09.2023 the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14 petitioner will not be able to fulfil his obligations to the third parties.
13. Learned senior counsel submits that the petitioner has already invoked the dispute resolution clause as contained in 16.6.1 in the agreement. However, since clause 16.6.2 requires three months time therefore immediate orders under Section 9 of the Arbitration and Conciliation Act are required to prevent the respondents from withdrawing its NOC and invoking the bank guarantee which is furnished by the petitioner in the sum of Rs. 16 crores.
14. I have considered the submissions. The letter dated 14.04.2023 issued by the respondent specifically states that in case of acceptance of 88MW capacity by MNRE, the NOC issued will stand withdrawn by SECI and the petitioner shall be allowed to schedule the power under this PPA.
15. The plea of the learned counsel for the petitioner is that in the communication dated 27.09.2023, there is no mention that there is any approval from the MNRE.
16. It is pertinent to mention here that the petitioner has not placed any document on record to show that the petitioner had started supplying the power to the other party. Though the learned senior counsel submits that it has been stated in Para-40 of the petition which reads as under:
"That the Petitioner has a good prima facie case in as much as the Petitioner (i) has already deposited, without any protest, all the liquidated damages sought by the Respondent; (ii) the Petitioner is not liable to any further liquidated damages to the Respondent; (iii) the PP A stood terminated by virtue of Article 4.6.2 thereof and the Respondent's own communications issued on 05.04.2023 and reiterated on 12.04.2023 and 14.04.2023; (iv) the PPA This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14 was an approved statutory commercial contract between the Respondent; (v) in terms of the NOC provided by Respondent, Petitioner was until now selling its capacity to third parties on exhange(s) from 20.04.2023 through Manikaran Power Limited. Further the arrangement also includes selling to any other utilities or distribution companies on short/ medium term basis; and (vi) that MNRE has no locus standi in the matter."
17. Issue notice to the respondent through all permissible modes returnable for 10.10.2023.
DINESH KUMAR SHARMA, J OCTOBER 5, 2023/AR..
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 07/10/2023 at 23:45:14