Jala Shakta Ltd. vs HIMACHAL PRADESH ELECTRICITY REGULATORY COMMISSION (R-1)

------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 1 of 28 IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction) APPEAL Nos.

309 of 2017 & 326 of 2017 Dated : 8th November, 2024 Present: Hon’ble Mr.

Sandesh Kumar Sharma, Technical Member Hon’ble Mr.

Virender Bhat, Judicial Member In the matter of: Jala Shakti Ltd., Through its Authorized Signatory, Shri AudityaYadlapati, Regd.

Office: H.

No.

135, Upper Julakari, Chamba, Himachal Pradesh – 176 318 ….

Appellant Versus 1) Himachal Pradesh Electricity Regulatory Commission Through its Secretary, Keonthal Commercial Complex, Khalini, Shimla – 171002 …Respondent No.

1 2) Himachal Pradesh State Electricity Board Ltd.

Through its Director, Kumar House, Shimla Himachal Pradesh – 171 004 …Respondent No.

2 3) The Himachal Pradesh Energy Development Agency, (Himurja) Through its Director, SDA Complex, Kasumpati, Shimla Himachal Pradesh - 171 009 …Respondent No.

3 Counsel on record for the Appellant(s) : Buddy A.

Ranganadhan for App.

1 ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 2 of 28 Counsel on record for the Respondent(s) : Pradeep Misra Manoj Kumar Sharma for Res.

1 Anand K.

Ganesan Swapna Seshadri for Res.

2 JUDGMENT PER HON’BLE MR.

VIRENDER BHAT, JUDICIAL MEMBER 1.

M/s.

Jala Shakti Limited, a Hydro Electric Power Generator in the State of Himachal Pradesh has filed these two appeals assailing therein the orders dated 19th September, 2015 and 3rd August, 2016 passed by the 1st Respondent, Himachal Pradesh Electricity Regulatory Commission (in short “Commission”) in two separate petitions bearing No.

198 of 2014 and 9 of 2016 respectively.

2.

In petition No. tition No.

198 of 2014, the Appellant had sought implementation of order dated 9th February, 2010 of the commission in pursuance to the order dated 18th September, 2009 passed by this Tribunal in Appeal Nos.

50 of 2008 and 65 of 2008 Techman Infra Ltd., V/s HPERC & Ors. and Himachal Pradesh State Electricity Board V/s Himachal Pradesh State Electricity Regulatory Commission & Anr. with respect to the Appellant’s power project and accordingly to re-determine the tariff upwards considering the project specific capital cost in view of ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 3 of 28 the said order dated 9th February, 2010.

In other words, the Appellant had sought determination of project specific tariff for its power project de hors the tariff of Rs.2.50 paisa per unit specified in the Power Purchase Agreement (PPA) executed by it with the 2nd Respondent – Himachal Pradesh State Electricity Board Ltd. (in short “Board”).

The petition has been disposed off by the Commission vide impugned order dated 19th September, 2015 declining to increase the tariff as well as to determine the project specific tariff but gave liberty to the Appellant to approach it again with the supporting data under 2nd proviso to sub-Regulation (1) of Regulation 6 of Himachal Pradesh Electricity Regulatory Commission (Power Procurement from Renewable Source and Co-generation by Distribution Licensees) Regulations, 2007 (hereinafter referred to as “HPERC Regulations, 2007”) as amended in 2007 which empowers the State Commission to review or modify the PPA in case any change in statutory laws/Rules and State Government Policy has taken place after the approval of PPA.

This order is under challenge in Appeal No.

326 of 2017.

3.

9 of 2016, the Appellant had sought a direction for amendment of the PPA entered by it with the 2nd Respondent by ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 4 of 28 incorporating the rider to the effect that “tariff and other terms & conditions of the PPA shall be subject to the provisions of the Commission’s Regulations on power procurement from renewable sources as and when such Regulations are framed” with further prayer for substitution of tariff @Rs.2.95 paisa per unit in the PPA in place of Rs.2.50 paisa per unit w.e.f.

May, 2013 i.e. from the date of the commissioning of the project.

The Commission held this petition barred by the principles of res judicata in view of pendency of the previous petition No.

198 of 2014 and thus declined to entertain the same holding it not maintainable.

This order has been assailed in Appeal No.

309 of 2017.

4.

The brief facts and circumstances of the case which are relevant for the disposal of these two appeals are narrated hereunder :- “(i) The Appellant executed Implementation Agreement (IA), to establish, operate and maintain the 5 MW Dunali Hydro Electric Power Project, with the Govt. of HP on 18th Nov., 2002, and also moved a joint petition i.e.

Petition No.

199/2004 with the Himachal Pradesh State Electricity Board, the predecessor of the Himachal Pradesh State Electricity Board Ltd.(Respondent No.2), for approval of the Power Purchase Agreement (in brevity “the PPA”).

The Commission accorded its approval on 28.03.2005 to the PPA, subject to the following observations that:- ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 5 of 28 “(a) The Model PPA approved by the Commission vide its Order dated 24th March, 2003 provides for Government Guarantee and the same can only be omitted from the PPA with the approval of the C l of the Commission for which purpose the parties need to file a joint application. (b) The Construction Schedule attached as Appendix ‘B’ to the Implementation Agreement by the Government of Himachal Pradesh and the Company for implementation of the project be made a part of the PPA. (c) The interconnection point in clause 2.2.46 of the PPA has been specified as 33 kV sub-station at Jarangla instead of 33 kV sub- station at Ghorla mentioned in clause 2.1(p) of the Implementation Agreement.

An amendment to the IA is required to be obtained first before effecting this change.” (ii) The PPA was ultimately executed on 11.01.2007 which provided that the Respondent No.2 shall pay for the Net Saleable Energy delivered by the petitioner to the Respondent Board at the Inter- connection Point at fixed rate of Rs.2.50 (rupees two and paise fifty only) per kWh.

This rate is stated to be firm and fixed without indexation and escalation and is not to be changed due to any reason, whatsoever.

The said rate is to remain applicable for a term of forty (40) years after the synchronization date of the first unit of the Project.

The date of the synchronization of this project is 16th May, 2013. (iii) In the meanwhile on 18th June, 2007, the Commission notified the Regulations for Power Procurement from Renewable Sources and Co-generation by the distribution licensee, under which the Commission may determine tariff by a general Order for Small Hydro Projects not exceeding 5 MW capacity and by a special Order for Small ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 6 of 28 Hydro Projects of more than 5MW and not exceeding 25 MW capacity, on individual project basis.

These Regulations were not applicable to the PPAs, which were approved prior to the commencement of the Regulations and were not subjected to the provisions of the Commission’s Regulations. (iv) On 18th Nov.

18th Nov., 2007, the Commission amended the Regulations (ibid) by introducing a provision under which the Commission in order to promote generation of electricity from renewable sources could review or modify the PPA approved prior to the commencement of the Regulations or where after the approval of the PPA there is change in statutory laws, or rules or the State Govt. policies. (v) Subsequently the Commission decided to determine the tariff for Small Hydro Energy Projects, based on cost plus approach with certain performance benchmarks and the Commission vide its Order dated 18.12.2007 worked out the relevant parameters and determined the levelised tariff for Small Hydro Projects upto 5 MW for 40 years from the date of commercial operation of the SHPs @ Rs.

2.87 per unit.

For determination of levelisad tariff for these projects the Commission approved the capital cost at Rs.

6.5 crores per MW and also determined a normative value of 45 percent for the Capacity Utilization Factor (CUF) for the purpose of tariff determination. (vi) The said Order dated 18.12.2007 was challenged by way of Appeal No.

50 of 2008, Techman Infra Ltd., New Delhi V/s HPERC & Ors. and Appeal No.

65 of 2008- the Himachal Pradesh State Electricity Board V/s the Himachal Pradesh State Electricity Regulatory Commission and another, and the Hon’ble APTEL vide its Order dated 18.9.2009 (2009 ELR (APTEL) 1025) passed in the said Appeals upheld the Commission’s orders with the observations that the ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 7 of 28 capital cost of 6.5 crores per MW shall be treated as normative capital cost in all such cases as are found suitable to all parties.

The promoters of hydel power in the State of Himachal Pradesh as well as the Himachal Pradesh State Electricity Board shall be entitled to apply to the Commission for fixing project specific capital cost for any project in roject in case the normative capital cost is not suitable to either of them.

Similarly if CUF of 45 percent for a specific project is contested by other party, it may approach the Commission with site specific CUF.

The Commission was also directed to remove arithmetical errors while re- computing the levelised tariff.

As a sequel to the APTEL Judgment dated 18.09.2009, passed in Techman Infra case (Supra), the Commission re-determined the tariff vide its Order dated 09.02.2010 @ Rs.2.95 per unit.” 5.

Subsequently, the Appellant approached the Commission by way of Petition No.

198 of 2014 for increase of tariff for the power generated and delivered by it from its Dunali power project to the 2nd Respondent from Rs.2.50 paisa per unit (as specified in the PPA) to Rs.2.94 paisa per unit (as determined by the Commission vide above noted order dated 9th February, 2010) or in the alternative to re-determine the tariff upwards considering the project specific capital cost.

6.

After the Commission disposed off the said petition vide impugned order dated 19th September, 2015 as already noted herein above, the Appellant approached the Commission again by way of fresh petition No. ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 8 of 28 9 of 2016 seeking amendment of the PPA and for substitution of tariff in the amended PPA as Rs.2.95 paisa per unit in place of Rs.2.50 paisa per unit w.e.f.

May, 2013 i.e. from the date of commissioning of the project.

As already noted herein above, this petition was held to be barred by the principles of res judicata and accordingly was dismissed as not maintainable vide another impugned order dated 3rd August, 2016.

7.

We shall first discuss the impugned order dated 19th September, 2015 passed by the Commission in Petition No.

198 of 2014 which is under challenge in Appeal No.

8. f 2017.

8.

The Commission had framed following three issues for its consideration :- “(a) Whether the Commission can review the already concluded PPA entered into between the petitioner company and the Respondent No.

2? (b) Whether there was undue influence or misuse of dominant power by the Respondent No.

2, in concluding the PPA with the petitioner company for sale of power from its hydro project ? (c) Whether the Order dated 18.09.2009 passed in Appeal Nos.

50 of 2008 and 65 of 2008- Techman Infra Ltd.

V/s HPERC & others and the Himachal Pradesh State Electricity Board V/s HPERC & another (2009 ELR (APTEL) 1025; is applicable to the present case and if so to what extent ?” ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 9 of 28 9.

All the three issues have been decided against the Appellant in the impugned order.

With regards to the first issue (a), the Commission while relying upon its earlier judgement dated 29th October, 2009 rendered in M/s DSL Hydrowatt Ltd.

V/s HP State Electricity Board in which it had discussed various judgements of this Tribunal, the Commission held that an already concluded PPA cannot be reviewed.

The reasoning for arriving at such decision is found in paragraphg No.

26, 27 & 28 of the impugned order which are extracted herein below :- “26.

The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates differently from the stipulated rates on some vague plea of equity.

The parties to the contract to execute contract are often faced, in the course of carrying it out, with a turn of events which they did not anticipate, wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution or the like. the like.

There is no general liberty reserved to the Courts to absolve a party from liability to perform his part of the contract merely because on account of a un-contemplated turn of events, the performance of the contract may become onerous.

A contracting party cannot be relieved from the performance of his part of the contract, if the frustration of the contract is self generated or the disability is self induced.

27.

The law is settled that the doctrine of impossibility of performance or frustration cannot be applied to cases of commercial transactions.

The mere fact that a contract has been rendered more ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 10 of 28 onerous does not of itself give rise to repudiation of the contract.

Impossibility of performance cannot be called commercial impossibility.

Merely commercial impossibility will not excuse a party from performing the contract.

Mere increased cost of performance or losing a transaction does not make the contract impossible.

A man is not prevented from performing his contract by mere economic un- profitableness.

28.

It is evident from the pleadings of the parties that the State Govt.

Policy for Small Hydro Projects, 2000, clearly stipulated that the developer had the option to sell the power generated by them to the State distribution agency and if the developer opts to sell to the said distribution agency, the distribution agency should have to purchase the same at the tariff of Rs.

2.50 per unit, which was to be firm and final and the generator had to pay royalty for the project site allotted to him.

In accordance with the State Policy of 2000, the petitioner company, on its application, was allotted the project, and subsequently to which IA on 18.11.2002, was executed.

The petitioner company, alongwith the Respondent No.2, moved a joint petition No. tition No.

199/2004 for approval of the PPA and the Commission accorded its approval on 28.03.2005; and the PPA was executed on 11.01.2007.

In all these documents the tariff was of Rs.

2.50 per unit.

Further no stipulation has been made in the Commission’s Order approving the PPA, that the project will come under the Regulations as and when framed.

Thus the tariff of Rs.

2.50 per unit was known to the developer from the date of allotment of project site, and well before the signing of the IA on 18.11.2002 and PPA on 11.01.2007 and the synchronization of project on 16.05.2013.

The tariff cannot be revisited because there is cost escalation.

Further there are no facts on record, much less, supported by any evidence to sustain the plea that the delay in signing the PPA was attributed to any reasons beyond the control of the petitioner.

Though the petitioner asserts that the cloud burst on 20th ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 11 of 28 & 21st August, 2012 and incessant rainfall/landslides, resulting in damage of power house area, necessitated the additional capitalization, yet there is nothing in the pleadings to prove that the petitioner ever pressed into service the provisions of Article 12 of the PPA, wherein the Party claiming that it has been rendered unable to perform any of its material obligations under the agreement by Force Majeure, it has to notify that event to the other Party, within 5 days of the occurrence, giving the particulars and satisfactory evidence in support of its claim.

Moreover, clause 12.5 specifically provides that delay in non- performance by a Party caused by the occurrence of the event of Force Majeure shall not give rise to any claim for damages or additional expenses occasioned thereby.” 10.

The Commission also held that the judgement of this Tribunal in Techman Infra Ltd. case (Appeal Nos. ppeal Nos.

50 of 2008 and 65 of 2008) is not applicable to the facts of the instant case in view of subsequent judgement of the Tribunal in M/s Patikari Power Ltd.

V/s HPERC & others 2012 ELR (APTEL) 1120.

11.

Learned Counsel for the Appellant argued that the impugned order of the Commission is absolutely erroneous and cannot be sustained.

He would submit that fixed tariff rate of Rs.2.50 paisa per unit without escalation for a period of 40 years (as per PPA) has not been determined by the Commission as per the principles of Section 61 of the Electricity Act, 2003 and, therefore, there is no valid tariff in the eyes of ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 12 of 28 law.

He argued that in such a situation, the Commission is not powerless to re-open the PPA and to re-determine the tariff for the project in question.

On this aspect, the Learned Counsel placed reliance upon the judgement of the Hon’ble Supreme Court in Tarini Infrastructure Limited vs.

Gujarat Urja Vikas Nigam Limited & ors. in Appeal No.

29 of 2021 decided on 31st May, 2012.

As upheld by the Hon’ble Supreme Court vide judgement dated 5th July, 2016 in Civil Appeal No.

5875 of 2020.

12.

It is further pointed out by the Learned Counsel that the Commission has itself noted in paragraph No.

3.24 of the tariff order dated 18th December, 2007 for small hydro projects that the tariff of Rs.2.50 paisa per kWh has been fixed by the Government of Himachal Pradesh in the year 2000 without any escalation for indexation which is not in accordance with the MNES Guidelines of 1993 which had specified that tariff @Rs.2.25 per kWh for the base year 1994 with annual escalation of 5% for a period of 10 years.

Learned Counsel also pointed out in paragraph No.

3.36 of the said tariff order dated 18th December, 2007, the Commission has also noticed that the tariff of Rs.2. f of Rs.2.50 per kWh is low and any increase in the same will have extremely marginal impact ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 13 of 28 on the over all tariff structure of the utility and would have only negligible impact on the consumers within the State.

13.

According to the Learned Counsel, the Commission while approving the PPA on 28th March, 2005, has inadvertently neglected to insert the rider in it to the effect that “tariff and other terms and conditions of the PPA shall be subject to the provisions of Himachal Pradesh Electricity Regulatory Commission (Power Purchase Procurement from Renewable Sources and Co-generation by Distribution Licensees) Regulations, 2007”.

He argued that this issue has been considered by this Tribunal in judgement dated 30th November, 2014 in Appeal No.

318 of 2013 titled Batot Hydro Power Limited Vs.

Himachal Pradesh Electricity Regulatory Commission & Another in which case similar rider clause regarding applicability by HPERC, Regulations, 2007 was deleted by the Commission while approving the PPA thereby restoring the tariff for the Batot Hydro Power Limited to Rs.2.50 Paisa per unit as per earlier Government of Himachal Pradesh Policy of 2000.

14.

It is argued that as per Regulation 6 of HPERC Regulations, 2007, the Commission is empowered to re-open or review or modify the PPA already executed between renewable power generator and the ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 14 of 28 beneficiary under two circumstances namely (i) Whether the PPA has not been subject to HPERC Regulations, 2007 previously or (ii) when there is a change in the statutory laws or rules or State Government Policy after the approval of PPA and the Appellant’s case falls in both these situations as the PPA executed by it with the 2nd Responde d Respondent was not subject to the Regulations and there has been change in the applicable laws/policies with the notification of 2007, Regulations.

It is further submitted by the Learned Counsel that most of the projects which are covered by the tariff order dated 18th December, 2007 of the Commission achieved commercial operation between the period 2009-2011 and are entitled to tariff at Rs.2.95 per unit after the execution of supplementary PPAs due to inclusion of the specific rider clause but the Appellant having achieved COD for its project on 16th May, 2013 is getting tariff of Rs.2.50 paisa per unit only on account of absence of the said specific rider clause in the PPA.

15.

On behalf of the 1st Respondent – Commission, it is argued that the Appellant’s petition has been disposed off after due consideration of the relevant Regulations, the terms/conditions contained in the PPA as well as the tariff order dated 18th December, 2007 and, therefore, it does ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 15 of 28 not call for any interference by this Tribunal.

16.

On behalf of the 2nd Respondent, HPSEB Ltd., it is vehemently argued that the parties are bound by the terms and conditions contained in the PPA dated 11th January, 2007 and the Commission has rightly observed in the impugned order that it has no power to vary any provision of the PPA including the tariff clause.

In this regard, reliance is placed on various judgement of this Tribunal as well as of the Hon’ble Supreme Court.

It is further submitted that the Appellant is indirectly seeking to challenge the order dated 28th March, 2005 of the Commission whereby the PPA was approved which is not permissible under law. under law.

It is argued that the said order has already attained finality and the parties also executed the PPA in pursuance to the same voluntarily and, therefore, the Appellant cannot be permitted to challenge the validity of the said order in these proceedings.

Learned Counsel for Respondent No.

2 referred to the clause 5.35 of the tariff order dated 18th December, 2007 under the heading “Applicability of the Order” to contend that the said order has been specifically made applicable to only those PPAs which had already been approved by the Commission with the rider that “Tariff and other terms and conditions of the PPA shall be subject to the ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 16 of 28 provisions of HPERC Tariff Regulations, 2007” as well as the PPAs to be approved by the Commission in future.

Thus, according to the Learned Counsel, the said tariff order is not applicable to be Appellant’s project in the absence of said specific rider in the PPA.

17.

We have given our thoughtful consideration to the rival submissions of the Learned Counsels.

We have also perused the impugned order and the entire material on record.

The written submissions filed by Learned Counsels have also been gone through.

18.

As we have already noted that the Appellant was allotted the power project in question in accordance with the State Policy of year 2000.

Implementation Agreement was signed between the Appellant and the Government of Himachal Pradesh on 18th November, 2002 whereby the Appellant was granted right to establish, operate and maintain 5 MW Dunali Hydro Power Project and to sell power generated in the project to the 2nd Respondent for a period of 40 years from the date of commercial operation.

A joint petition No.

199 of 2004 for approval of the PPA was moved and the Commission accorded its approval on 28th March, 2005. rch, 2005.

The PPA was executed on 11th January, 2007 which contains a specific tariff clause i.e. clause 6.2 which we quoted hereunder :- ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 17 of 28 “6.2 TARIFF FOR NET SALEABLE ENERGY The Board shall pay for the Net Saleable Energy delivered by the Company to the Board at the Interconnection Point at a fixed rate of Rs.

2.50 (Rupees two and paise fifty) per Kilowatt hour.

This rate is firm and fixed without indexation and escalation and shall not be changed due to any reason whatsoever.” 19.

Thus, as per the PPA, the tariff for the power project was to remain Rs.2.50 per KWH throughout without any indexation and escalation.

20.

The Commission notified the regulations for power procurement from renewable sources and co-generation by the Distribution Licencees on 18th June, 2007 which shall be referred herein after as Tariff Regulations, 2007.

The Regulations empowered the Commission to determine tariff by a general order for small hydro projects not exceeding 5 MW capacity and by a special order for small hydro projects of more than 5 MW capacity but not exceeding 25 MW capacity on individual project basis.

In pursuance to these Regulations, the Commission proceeded to determine tariff for small hydro projects not exceeding 5 MW capacity based on cost plus approach with certain performance bench marks and accordingly issued the tariff order dated 18th December, 2007 wherein the levelized tariff for such hydro projects was ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 18 of 28 determined as Rs.2.87 per unit for 40 years from the date of their commercial operation.

Notably, the challenge to the said tariff order was rejected by this Tribunal vide order dated 18th September, 2009 passed in Appeal Nos.

50 of 2008 and 65 of 2008.

21.

2008.

In pursuance to the said order dated 18th September, 2009 of this Tribunal, the Commission issued fresh order dated 9th February, 2010 modifying the tariff order dated 18th December, 2007 to the following extent :- “(i) If any hydel power producer has a problem on account of negative cash flow, he shall approach the Commission within 1 year of the commercial operation date of its project.

The Commission, in order to mitigate the negative cash flow problem of the producer, may give two levelised tariffs i.e. the first for twelve years and the second for remaining years.

The levelised tariff for the two periods shall take into consideration the adjustment of deficit and surpluses accrued over the periods of levelised tariff. (ii) the tariff at Rs.

2.87/unit, shall be taken as the tariff at Rs.

2.95/unit. (as on 18-12-2007)” 22.

It is on the basis of the said modified tariff order dated 9th February, 2010 of the Commission that the Appellant had filed petition No.

198 of 2014 seeking re-determination of tariff for its power project ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 19 of 28 upwards from Rs.2.50 per unit to Rs.2.95 per unit, which has been rejected by the Commission by the impugned order.

23.

The Commission has observed that it has no power to review/re- open a concluded PPA signed between the Appellant and the 2nd Respondent and, therefore, the tariff fixed therein cannot be re-visited.

24.

We have gone through the tariff order dated 18th December, 2007 as well as subsequent order dated 9th February, 2010 by which it was modified as stated herein above.

The clause related to applicability of the order is relevant for our discussion and is extracted herein below. “Applicability of order 5. f order 5.35 This order shall be applicable to all such Power Purchase Agreements (not exceeding 5 MW) which have already been approved by the Commission with a specific clause that “Tariff and other terms and conditions of the PPA shall be subject to the provisions of the Himachal Pradesh Electricity Regulatory Commission (Power Procurement from Renewable Sources and Co-generation by Distribution Licensee) Regulations, 2007” and also the Power Purchase Agreements to be approved by the Commission hereinafter.” (Emphasis supplied) 25.

We find the contents of this applicability clause in the tariff order very strange as well as ludicrous.

This order was issued on 18th December, 2007 in pursuance to the tariff Regulations notified on 18th June, 2007.

We wonder as to how the parties executing a PPA in the ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 20 of 28 year 2006-2007 i.e. before the notification of Regulations dated 18th June, 2007 can be expected to know that the Commission is contemplating of issuing the tariff Regulations and would accordingly, request the Commission to include a specific rider in the PPA to the effect that “tariff as well as other terms and conditions in the PPA shall be subject to tariff Regulations, 2007 to be issued /notified on some future date”.

The extent of applicability of the said tariff order appears to be ironical as well as incomprehensible.

Faced with such situation, we had passed following order on 19th March, 2024:- “We find it appropriate to direct the State Commission to place before us the records pertaining to applicability of order dated 18.12.2007 enclosing therewith the details of the PPAs along with the copies of the PPAs where the specific clause “tariff and other terms & conditions of the PPA shall be subject to the provisions of the Himachal Pradesh Electricity Regulatory Commission (Power Procurement from Renewable Sour wable Sources and Co- generation by Distribution Licensees) Regulations, 2007” have been included and such PPAs have been approved before issuance of this order.

The same may be furnished within three weeks along with an affidavit from the Secretary of the State Commission.

It is also submitted that the State Commission shall also furnish the details of the PPAs which have been amended subsequent to this order based on the applicability of this order.” 26.

In pursuance to the said order of this Tribunal, an affidavit was filed on behalf of the Commission on 24th April, 2024 annexing therewith the ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 21 of 28 details of the PPAs where specific clause “tariff and other terms & conditions of the PPA shall be subject to the provisions of HPERC Regulations, 2007” had been included in the PPA approval order by the Commission before the issuance of Tariff Regulations dated 18th June, 2007.

As per the list annexed to the affidavit there were 33 PPAs in which said specific clause was included by the Commission in the approval order.

We find it apposite to reproduce the details of these 33 PPAs hereunder :- “DETAIL OF THE PPAs ALONGWITH ITS TRUE COPIES, WHERE SPECIFIC CLAUSE “TARIFF AND OTHER TERMS & CONDITIONS OF THE PPA SHALL BE SUBJECT TO THE PROVISIONS OF THE HPERC (POWER PROCUREMENT FROM RENEWABLE SOURCES AND CO-GENERATION BY DISTRIBUTION LICENSEES) REGULATIONS, 2007” HAD BEEN INCLUDED IN THE PPA APPROVAL ORDER BY THE COMMISSION BEFORE ISSUE OF ORDER DATED 18.12.2007 (ALONG WITH TRUE COPIES OF SPPAs).

Sr.

Parties Name Name of Project with capacity (MW) Date of Order Date of Execution of PPAs Date of Execution of SPPAs Remark s 1 2 3 4 5 6 7 8 1 97/2006 Cimron Construction TRALLA- II (5) 13.07.2006 06.12.2006 31.08.2010 Ann.

R- 1/1 2 98/2006 A.T.

Hydro Pvt.

Ltd.

UPPER TARAILA (5) 13.07.2006 06.12.2006 31.08.2010 Ann. .2010 Ann.

R- 1/2 3 155/2006 Sri Sai Krishna Hydro LUNI-II (5) 12.07.2006 14.01.2008 31.08.2010 Ann.

R- 1/3 4 224/2007 Anubhav Hydel Power BINUA- PARAI (5) 21.11.2007 28.06.2008 31.08.2010 Ann.

R- 1/4 5 124/2007 Puri Oil Mills Ltd CHAKSHI (2) 13.06.2007 30.08.2007 28.11.2011 Ann.

R- 1/5 ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 22 of 28 6 154/2006 Sri Sai Krishna Hydro LUNI-III (5) 12.07.2006 14.01.2008 31.08.2010 Ann.

R- 1/6 7 90/2007 Dharamshala Hydro MAUJHI- II (5) 27.04.2007 27.05.2009 19.10.2010 Ann.

R- 1/7 8 89/2007 Sai Engineering Foundation MARHI (5) 05.05.2007 29.03.2007 06.07.2011 Ann.

R- 1/8 9 112/2007 Manglam Energy Development PALOR-II (0.5) 31.05.2007 PPA Not Executed SPPA Not Executed Ann.

R- 1/9 10 153/2006 Astha Projects (India) UPPER AWA (5) 12.07.2006 14.01.2008 31.08.2010 Ann.

R- 1/10 11 241/2007 K.K.K.

Hydro Power Ltd.

BARAGR AN (4.9) 04.12.2007 11.03.2008 10.09.2010 Ann.

R- 1/11 12 88/2007 Sai Engineering Foundation SHYANG (3) 05.05.2007 17.09.2007 16.11.2010 Ann.

R- 1/12 13 321/2005 Vamshi Industrial Power DRINIDH AR (5) 13.07.2006 01.12.2006 06.12.2010 Ann.

R- 1/13 14 67/2006 Vamshi Industrial Power BANER- III (5) 19.07.2006 01.12.2006 06.12.2010 Ann.

R- 1/14 15 65/2006 Vamshi Industrial Power IKU-II (5) 13.07.2006 01.12.2006 06.12.2010 Ann.

R- 1/15 16 66/2006 Vamshi Industrial Power UPPER KHAULI (5) 13.07.2006 01.12.2006 06.12.2010 Ann.

R- 1/16 17 236/2006 HIMURJA JUTHED (0.1) 14.12.2006 16.05.2007 10.12.2010 Ann.

R- 1/17 18 110/2007 HIMURJA GHAROL A (0.1) 01.06.2007 04.10.2007 10.12.2010 Ann.

R- 1/18 19 109/2007 HIMURJA PURTHI (0.1) 01.06.2007 04.10.2007 10.12.2010 Ann.

R- 1/19 20 235/2006 HIMURJA KOTHI (0.2) 14.12.2006 16.05.2007 10.12.2010 Ann.

R- 1/20 21 111/2007 HIMURJA SURAL (0.1) 01.06.2007 04.10.2007 10.12.2010 Ann.

R- 1/21 22 323/2005 Excel Cars Ltd./ Regent Energy Ltd.

RAKCHA D (5) 15.07.2006 19.12.2006 05.01.2011 Ann. .2011 Ann.

R- 1/22 23 144/2007 Raheja Hydel Power Ltd.

GAJ-II (1.5) 18.06.2007 11.11.2010 27.01.2011 Ann.

R- 1/23 24 263/2006 Sodhi Brothers LLC BRAH (4) 29.01.2007 11.04.2007 25.02.2011 Ann.

R- 1/24 25 72/2007 Shakti Hydro Electric Co.

UBHARA HA (2.4) 05.05.2007 06.12.2007 27.04.2015 Ann.

R- 1/25 26 115/2006 Shri Shashi HEP (P) Ltd.

SAMSHA R (1.5) 15.07.2006 07.12.2007 Not Executed Ann.

R- 1/26 ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 23 of 28 27 320/2005 Ravipati Venkateswar a Rao GUMMA- II (2.5) 15.07.2006 07.12.2006 Not Executed Ann.

R- 1/27 28 172/2006 B.K.

Saini Engineers / Gopal Powerpro SIUNR (1.5) 27.09.2006 12.12.2006 02.12.2020 Ann.

R- 1/28 29 143/2007 Water Millers Power Co.

CHHOR (1) 18.06.2007 05.06.2008 SPPA Not Executed Ann.

R- 1/29 30 264/2006 First Hydro Generation HUL-II (3.4) 29.01.2007 07.04.2007 SPPA Not Executed Ann.

R- 1/30 31 234/2006 Saini Techno Constructs DEHAR- 11 (1.5) 14.12.2007 05.05.2007 SPPA Not Executed Ann.

R- 1/31 32 362/2005 Growel Energy Co.

ANI (5) 15.07.2006 Not Executed SPPA Not Executed Ann.

R- 1/32 33 78/2006 Batot Hydro Power Pvt.

BELIJ- KA- NALLAH (3.5) 15.07.2006 Not Executed PPA Executed initially on 04.01.2012 under REC* Ann.

R- 1/33 27.

One thing which is manifest from the list is that in all these PPAs the Tariff clause was identical to that in the PPA executed in this case between Appellant and 2nd Respondent.

It is at this time of approving these PPAs that the Commission directed insertion of specific rider “tariff and other terms & conditions of the PPA shall be subject to the provisions of HPERC Regulations, 2007” in them and accordingly supplementary PPAs were executed later on.

Further, in all these cases, the PPA approval order was passed by the Commission well before the date of notification of the 2007 Regulations.

28. tions.

In the instance case before us, the Commission accorded its approval to the PPA between the Appellant and the 2nd Respondent on ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 24 of 28 28th March, 2005 subject to certain conditions which have been enumerated in paragraph 4(i) herein above.

Curiously, the Commission did not ask the parties in this case at that time to include the rider “tariff and other terms & conditions of the PPA shall be subject to the provisions of HPERC Regulations, 2007” in the PPA.

We may note that at the time of submitting the PPA to the Commission for approval by way of joint petition No.

199 of 2004, no knowledge could be imputed either to the Appellant or to the 2nd Respondent that the Commission is in the process of framing fresh tariff Regulations which would be notified in near future and the same would specify higher tariff.

It was the duty of the Commission to apprise the parties to the PPA about the same as was done by the Commission in the case of 33 PPAs, details of which have been set out herein above.

It is, therefore, amply clear that the Appellant has been deprived of the benefits under the tariff Regulations, 2007 by the callous approach of the Commission itself which has acted in a total unfair, malicious and irrational manner.

It has no where been explained on behalf of the Commission as to why did it, by way of its approval order, got the specific rider in question included in above referred 33 PPAs and did not do so in case of PPA between the Appellant and the 2nd ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 25 of 28 Respondent.

The Commission, being a Government instrumentality, is expected to conduct its affairs in an impartial, bonafide and transparent manner. nt manner.

It is not expected to adopt a pick and choose policy and provide the benefits of a Regulation to a few while depriving the others of those benefits.

We find the approach of the Commission absolutely discriminatory and unacceptable as well as atrocious, to say the least.

No yardstick, much less a rational one, appears to have been adopted by the Commission in approving the above noted 33 PPAs with the specific rider regarding applicability of Tariff Regulations, 2007 and in not doing so in case of the Appellant herein.

We strongly disapprove such colourable and unjustified exercise of power by the Commission.

29.

We do not find this a case related to review/re-opening of an already executed PPA.

To the contrary, it is a classic case which brings to light the malafide and unconscionable conduct of a Government instrumentality like the Electricity Regulatory Commission which has deprived the Appellant of the benefits under Tariff Regulations, 2007 as well as a tariff order dated 18th December, 2007.

The grievance of the Appellant brought before the Commission by way of the petition was a genuine one and should have been addressed by the Commission.

It was ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 26 of 28 a golden opportunity for the Commission to rectify its wrongs and to do justice to the Appellant by placing it at par along with the other 33 entities regarding which it has approved the PPAs with the rider in question.

But the Commission erred by mis-directing itself by taking it to be a case for review of an already executed PPA.

30.

Considering the above discussion, we are of the firm view that the impugned order of the Commission cannot be sustained.

The same is hereby set aside. set aside.

The Commission shall accord the fresh approval to the PPA between the Appellant and the 2nd Respondent including therein the specific rider “tariff and other terms & conditions of the PPA shall be subject to the provisions of HPERC Regulations, 2007”.

The approval would date back to the date of initial approval i.e.

28th March 2005 and accordingly, the Appellant would be covered by tariff Regulations, 2007 as well as the tariff order dated 18th December, 2007.

Needless to say that the entire exercise shall be completed by the Commission within one month from the date of the judgement.

31.

Coming to the order dated 3rd August, 2016 of the Commission vide which it held the subsequent petition No.

9 of 2016 of the Appellant not ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 27 of 28 maintainable and barred by the principles of res judicata and which has been assailed in Appeal No.

32.

We do not find any error or infirmity in the said order of the Commission.

Essentially, the prayer of the Appellant in both the petitions was identical i.e. to get the benefit of tariff determination in the tariff order dated 18th December, 2007 which was issued in pursuance to the tariff Regulations, 2007 notified on 18th June, 2007.

Therefore, the Commission has rightly held the said petition barred under the practice of res judicata as enunciated in Section 11 of Code of Civil Procedure, 2019 which was applicable at the relevant time.

The Appeal No.

309 of 2017 is, thus, found devoid of any merit and liable to be dismissed.

Conclusion 33.

Appeal No.

326 of 2017 stands allowed.

The Commission shall accord the fresh approval to the PPA between the Appellant and the 2nd Respondent including therein the specific rider “tariff and other terms & conditions of the PPA shall be subject to the provisions of HPERC Regulations, 2007”. ns, 2007”.

28th March 2005 and accordingly, the Appellant would be ------------------------------------------------- Appeal No.

309 & 326 of 2017 Page 28 of 28 covered by tariff Regulations, 2007 as well as the tariff order dated 18th December, 2007.

34.

309 of 2017 stands dismissed.

Pronounced in the open court on this 8th day of November, 2024. (Virender Bhat) (Sandesh Kumar Sharma) Judicial Member Technical Member (Electricity) js