Clp India Pvt Ltd vs Gujarat Urja Vikas Nigam Ltd. on 6 May, 2020
＂ Section 43 empowers Electricity Board to enter into arrangement for purchase of
electricity on such terms as may be agreed. Section 43-A(1) provides that a generating company
may enter into a contract for the sale of electricity generated by it with Electricity Board. As
regards the determination of tariff for the sale of electricity by a generating company to the
Board, Section 43(1)(2) provides that the tariff shall be determined in accordance with the norms
regarding operation and plant load factor as may be laid down by the authority and in
accordance with the rates of depreciation and reasonable return and such other factors as may be
determined from time to time by the Central Government by a notification in the official gazette.
These provision clearly indicate that the agreement can be on such terms as may be agreed by the
parties except that the tariff is to be determined in accordance with the provision contained in
Section 43-A(2)and notifications issued thereunder. Merely because a contract is entered into in
exercise of an enacting power conferred by a statute that by itself cannot render the contract a
statutory contract. If entering into a contract containing prescribed terms and conditions is a
must under the statute than that contract becomes a statutory contract. If a contract incorporate
certain terms and conditions in it which are statutory then the said contract to that extent is
statutory. A contract may contain certain other terms and conditions which may not be of a
statutory character and which have been incorporated therein as a result of a mutual agreement
between the parties. Therefore, the PPAs can be regarded as statutory only to the extent that they
contain provisions regarding determination of tariff and other statutory requirements of Section
43A(2)."