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(h) Thereafter, the Respondent Company paid the entire principal amount to the Appellant. However, the Respondent Company did not pay the interest amount payable as per the PPAs, in spite of repeated demands.

(i) Therefore, on 05.06.08, the Appellant issued the notice terminating the PPA and the supplemental PPA to the Respondent Company on the ground that the Respondent Company had violated the terms of Agreements on account of non-payment of interest despite repeated demands. Even for this, there was no immediate response. Thereafter, the Appellant applied for Open Access for third party sale on 1.7.2008. Accordingly, State Load Despatch Centre gave consent for the Open Access on 8.7.2008. Consequently, the Appellant Company entered into a Power Purchase Agreement with M/s. Reliance Energy Trading Company, the 3rd Respondent for the supply of electricity and began to supply electricity availing the Open Access.

(S S Bakkesh) Managing Director Copy to:

Managing Director Karnataka Power Transmission Corporation Ltd., Kaveri Bhavan, Bangalore-560 001"

48. The reading of the above Termination Notice would show that the Distribution Company, BESCOM has been regularly defaulting in making the payments and even after the execution of the Supplemental PPA dated 5.5.2006, the amount of arrears was paid to the Generating Company after long delay and in spite of their repeated requests, no interest was paid to them on the said belated payments and therefore, they terminated the PPA dated 7.3.1998 as well as the Supplemental PPA dated 5.5.2006.

(3) Whether the consent granted by the 3rd Respondent-Chief Engineer, SLDC for Open Access is liable to be set aside?

68. The reading of the above issues would show that there was no reference to the legality of the termination.

69. On the other hand, the State Commission while discussing the Issue No.I has referred to a fresh question as to whether the termination of the PPA by the Generating Company sent on 5.6.2008 was valid or not.

70. While answering this question, the State Commission came to the conclusion that the Generating Company could not terminate the PPA merely on the ground that the interest amount was not paid and that therefore the termination of the PPA was invalid and the PPA would continue to be subsisting. This conclusion was arrived at mainly on the ground that the earlier Petition in OP No.10 of 2006 claiming the amount of arrears was withdrawn by the Appellant in view of the settlement between the parties and as such, this issue cannot be re- agitated as observed in the another order passed by the State Commission dismissing the OP No.14 of 2009 filed by Appellant claiming the interest amount.

87. There is no dispute in the fact that the Appellant had supplied power to the 3rd party only after obtaining the Open Access from State Load Despatch Centre in accordance with the provisions of the Electricity Act, 2003. As a matter of fact, the State Commission while considering the issue No.3 in OP No.26 of 2008 had clearly found that the consent for the Open Access granted by the State Load Despatch Centre was perfectly valid. As such, the main prayer made by the Distribution Company before the State Commission to set-aside the consent order and to pass the consequential order was rejected by the State Commission. While the main prayer was rejected, giving a declaration for the existence of the PPA cannot be sustained under law especially when the Appellant who terminated the PPA on 5.6.2008 was allowed to avail the Open Access for the period between 8.7.2008 to 30.11.2008 by the State Load Dispatch Centre and the Distribution Company did not choose to question the grant of Open Access during that period.