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Adani Power Limited v. Uttar Haryana Bijli Vitran Nigam Limited
Structured Summary of the Review Petition Decision
Factual and Procedural Background
The review petition was filed by Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited (the Review Petitioners) under Section 94 of the Electricity Act, 2003 read with Regulation 103 of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 seeking review of the Commission's order dated 16.10.2012 (the impugned order). The impugned order had held that Petition No. 155 of 2012 filed by Adani Power Ltd. was maintainable and admitted it for hearing on merits.
Background facts as recorded in the opinion:
- Gujarat Urja Vikas Nigam Ltd. (GUVNL) and the Review Petitioners each invited competitive bids independently under Central Government competitive bidding guidelines. Adani Power Ltd. participated in both processes and was declared successful in both, entering into separate Power Purchase Agreements (PPAs) with GUVNL and the Review Petitioners. The PPAs were approved by the respective State Commissions.
- Adani Power stated that its bid had taken into account imported coal prices from Indonesia. Subsequent Indonesian coal price regulation substantially increased import coal prices, which Adani alleged made supply at agreed tariffs unviable.
- Adani Power filed Petition No.155/2012 seeking (a) a mechanism to restore its economic position or revise tariffs under the PPAs; (b) alternatively, declaration of discharge from the PPAs due to frustration; (c) declaration that any revised tariff apply from Scheduled Commercial Operation Date; (d) interim directions for procurement on cost-plus basis or suspension of PPAs pending resolution; and (e) other appropriate reliefs.
- The Commission treated jurisdiction/maintainability as a preliminary issue; after receiving replies, the Commission (by the impugned order) upheld jurisdiction and admitted the petition.
- The Review Petitioners sought review on grounds that the impugned order misstated their stance (alleged concession on jurisdiction) and failed to consider their written submissions, including reliance on an earlier Commission order in Petition No.103/2005 (Uttranchal Jal Nigam Ltd. v. Uttranchal Power Corporation Ltd.).
Legal Issues Presented
- Whether the Central Commission (CERC) had jurisdiction under Section 79(1)(b) of the Electricity Act, 2003 to adjudicate the dispute raised by Adani Power Ltd. (i.e., whether Adani had a "composite scheme" for generation and sale of electricity in more than one State).
- Whether the impugned order of 16.10.2012 incorrectly recorded that the Review Petitioners had conceded jurisdiction and therefore whether that error justified review under Order 47, Rule 1 CPC.
- Whether the impugned order failed to take into account binding precedents (Appellate Tribunal/CERC orders) such that the impugned order contained an error apparent on the face of the record warranting review.
Arguments of the Parties
Review Petitioners' Arguments
- They denied having conceded jurisdiction to this Commission and contended that the impugned order wrongly recorded such a concession in paras 10 and 16.
- They maintained that their written submissions projected that the respective State Commissions alone had jurisdiction to decide the dispute raised by Adani Power Ltd.
- They submitted the impugned order failed to take cognisance of their written submissions, including a submission relying on this Commission's earlier order in Petition No.103/2005 (Uttranchal Jal Nigam Ltd. v. Uttranchal Power Corporation Ltd.).
- At hearing, counsel further relied on para 2.4 of the Competitive Bidding Guidelines (19.1.2005) to argue that where there was no combined procurement across States, the Appropriate Commission would not be the Central Commission; they asserted no combined bidding had taken place here.
Adani Power Ltd.'s Arguments
- Adani Power supported the impugned order, contending it was not based merely on concessions but contained an elaborate discussion resulting in a conclusion that Adani had a composite scheme (paras 19 and 20 of the impugned order).
- Adani argued the review petition was beyond the scope of Order 47, Rule 1 CPC because the impugned order decided the jurisdictional issue on merits.
- Adani referred to Supreme Court authorities (Thungabhadra Industries Ltd. v. Government of A.P., AIR 1964 SC 1372; Haridas Das v. Usha Rani Banik, (2006) 4 SCC 78) to support its position on the limited scope of review.
- Adani pointed to para 8 of the reply filed by the Review Petitioners, which it said supported the Commission's finding that the Review Petitioners had conceded jurisdiction under Section 79.
- At hearing, Adani's senior counsel submitted the Commission decided jurisdiction on merits, there was no error apparent on face of record, and that disagreement on merits is not a ground for review.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| PTC India Ltd. v. CERC (Appellate Tribunal judgment dated 23.11.2006) | Interprets clause (b) of sub-section (1) of Section 79: Central Commission may regulate tariff of a generating company having a composite scheme for generation and sale of electricity in more than one State; emphasizes need for uniform approach where tariff matters are common to more than one State. | The Court held reliance on this judgment by Review Petitioners was misplaced; on analysis the Appellate Tribunal's ratio supports the impugned order because the Tribunal emphasised uniformity of approach on tariff matters common to more than one State. The Court found no conflict between that judgment and the impugned order. |
| Order dated 29.3.2006 in Petition No.103/2005 — Uttranchal Jal Nigam Ltd. v. Uttranchal Power Corporation Ltd. (CERC order) | Discussed interpretation of "composite scheme" in clause (b) of sub-section (1) of Section 79(1): held composite scheme is one where a generating station is originally conceived to meet requirements of more than one State and beneficiaries are pre-identified; in that case the generating stations in dispute did not qualify as composite scheme. | The Court distinguished that order on facts: UJVNL concerned specific hydro stations with barter-like arrangements and the Commission there spoke of "generating station" rather than "generating company". The present case involves a generating company (Adani) with generation and planned stations in multiple States; thus UJVNL did not provide support for Review Petitioners' plea. |
| Order dated 16.5.2012 in Petition No.20/2012 — GMR Kamalanga Energy Ltd. v. Grid Corporation of Orissa Ltd. (CERC order) | Held CERC has jurisdiction to determine tariff for generating companies that have a composite scheme for generation and sale to distribution licensees in more than one State; a generating company may acquire composite character after commissioning of part of a generating station. | The Court held there is no inconsistency between that order and the impugned order. The 16.5.2012 order confirms that a generating company can acquire a composite scheme at any stage and thus supports CERC jurisdiction as applied in the impugned order. |
| Order dated 11.1.2010 in Petition No.109/2009 — Torrent Power Ltd. (CERC order) | Observed that while CERC can regulate tariff of generating companies with composite schemes under Section 79(1)(b), issues outside that scope or relating strictly to PPA terms may be outside the petition before the Commission; highlighted need for petitioner to maintain inter-State character. | The Court found that the Torrent Power order does not conflict with the impugned order; it was consistent with the proposition that CERC's jurisdiction attaches where a generating company supplies to more than one State. |
| Thungabhadra Industries Ltd. v. Government of A.P., AIR 1964 SC 1372 (Supreme Court) | Authority cited by Adani Power to support limited scope of review (as invoked under Order 47, Rule 1 CPC). | The Court noted Adani's reliance on this Supreme Court authority to argue the review petition was barred as it sought to re-agitate matters on merits; the Court applied the settled principle limiting review to grounds under Order 47, Rule 1 CPC. |
| Haridas Das v. Usha Rani Banik, (2006) 4 SCC 78 (Supreme Court) | Authority cited by Adani Power relating to the scope of review remedies under civil procedure rules. | The Court relied on Adani's citation of this authority to reinforce that review proceedings cannot be used to reargue merits and that the scope of review is limited. |
Court's Reasoning and Analysis
The Court proceeded through a structured analysis focused on the limited scope of review and the preliminary jurisdictional findings made in the impugned order. The reasoning and steps taken by the Court are summarized below, drawing only on material present in the opinion:
- Identification of the issue for review: whether the impugned order wrongly recorded concessions by the Review Petitioners on jurisdiction and whether it ignored binding precedents or earlier Commission orders relevant to maintainability.
- Examination of the impugned order's findings: the Court extracted and considered paras 10 and 16 of the impugned order which recorded that (i) respondents had conceded that Mundra Power Project had a composite scheme and that CERC would have jurisdiction under clause (f) of Section 79(1), and (ii) the dispute should be decided in accordance with the PPAs and also raised issues of frustration/force majeure requiring adjudication.
- Review of the Review Petitioners' replies: the Court examined the replies filed by GUVNL and the Review Petitioners (affidavits dated 23.8.2012 and 22.8.2012). The Court extracted portions showing that the respondents had pleaded that CERC may entertain matters under Section 79(1)(f) provided such matters did not affect rights and obligations under the PPAs, and that CERC would have jurisdiction under Section 79(1)(b) in regard to composite-scheme matters.
- Conclusion on alleged concession: based on the replies, the Court concluded that the Review Petitioners had, in effect, consented to exercise of jurisdiction by the Commission under clause (b) of Section 79(1) on the ground of the existence of a composite scheme. Thus the recording in para 10 was not erroneous on its face.
- Basis for para 16 observation: the Court traced para 16 of the impugned order to para 6 of the Review Petitioners' reply (affidavit dated 22.8.2012) which stated that relief should be addressed strictly in accordance with the PPAs. The Commission's observation that the questions raised would be considered in accordance with the PPAs therefore derived from the respondents' own pleadings.
- Scope of review: the Court emphasized that even if an alternative reading of the respondents' pleadings was possible, a mere possibility of another view does not constitute an error apparent on the face of the record. The Court reiterated that review is not a vehicle to reargue the matter on merits and is limited by Order 47, Rule 1 CPC.
- Consideration of precedents: the Court analyzed the authorities and orders relied upon by the Review Petitioners (Appellate Tribunal's PTC India Ltd. judgment, the UJVNL order, GMR Kamalanga order, Torrent Power order). For each it assessed whether the impugned order conflicted with them:
- The Court found the Appellate Tribunal judgment to support, rather than contradict, the need for a uniform approach in matters common to more than one State and thus consistent with the impugned order.
- The UJVNL order was distinguished on facts because it dealt with specific hydro station arrangements and the analysis was in terms of "generating station" rather than "generating company"; the present case concerned the generating company with multiple stations in different States.
- The GMR Kamalanga order was held to be in harmony: it recognized that a generating company may enter into or acquire a composite scheme even after commissioning of part of a station.
- The Torrent Power order did not conflict with the impugned order and supported the proposition that CERC's jurisdiction attaches where a generating company supplies to more than one State.
- Final evaluative conclusion: the Court found no error of fact or law apparent on the face of the record and determined there was no justification for review of the impugned order. Consequently, the review petition was dismissed.
Holding and Implications
Holding:
REVIEW PETITION DISMISSED.
Implications and direct consequences (as set out in the opinion):
- The impugned order dated 16.10.2012 upholding the Commission's jurisdiction and admitting Petition No. 155/2012 for hearing on merits stands undisturbed.
- The Court found no error apparent on the face of the record in the impugned order: the observations in paras 10 and 16 followed from the respondents' own replies and the legal analysis undertaken by the Commission.
- The Court held that precedents and earlier Commission orders relied upon by the Review Petitioners did not demonstrate any conflict with, or error in, the impugned order; where facts differed (e.g., UJVNL), those earlier orders were distinguished on the basis given in the opinion.
- No new precedent or departure from binding appellate authority or the Commission's prior orders was effected by the impugned order according to the Court's analysis; the dismissal therefore results in the continuation of the impugned order's approach to jurisdiction and maintainability in this matter.
End of summary — prepared strictly from the information contained in the provided opinion.
The review petition has been filed by Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijili Vitran Nigam Limited (hereinafter “the Review Petitioners”) under Section 94 of the Electricity Act, 2003 read with Regulation 103 of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 seeking review of the order dated 16.10.2012 (hereinafter “the impugned order”), whereby this Commission has decided in favour of maintainability of the Petition No. 155 of 2012 filed by Adani Power Ltd.
2. Gujarat Urja Vikas Nigam Ltd. (hereinafter “GUVNL”) and the Review Petitioners had invited bids for procurement of power in accordance with the competitive bidding guidelines issued by the Central Government, independently of each other. Adani Power Ltd. participated in both the bidding processes and was declared successful. Accordingly, Adani Power Ltd. entered into separate Power Purchase Agreements (hereinafter “the PPAs”) with GUVNL and the Review Petitioners for supply of power at tariffs discovered through the competitive bidding. The PPAs were approved by the respective State Commissions. According to Adani Power Ltd., it had taken into consideration the prices of coal imported from Indonesia while quoting the tariff for supply of electricity. However, after enactment of New Coal Pricing Regulation by the Indonesian Government, the prices of imported coal were said to have substantially increased which, according to Adani Power Ltd., has made the supply of power at the agreed tariffs unviable. Therefore, Adani Power Ltd. has filed the petition (Petition No. 155/2012) before this Commission seeking the following reliefs, namely:—
“a) to evolve a mechanism to restore the Applicant to the same economic condition prior to occurrence of Subsequent Events mentioned in respective Part I & II hereinabove by adjudicating the disputes between the Applicant and the Respondent(s) in relation to regulate including changing and/or revising the price/tariff under PPAs dated 7.8.2008 with UHBVNL and DHBVNL and 2.2.2007 with GUVNL;
b) in the alternative, to declare that the Applicant is discharged from the performance of the PPAs on account of frustration of the PPAs due to Subsequent Events in respective Part I & II;
c) this Hon'ble Central Commission be pleased to declare that the revised tariff shall be applicable from the Scheduled Commercial Operation Date (SCoD) of the PPAs;
d) that during the pendency of the present Application Hon'ble Central Commission may direct the Respondent(s) to procure power on the cost plus basis, alternatively, the Hon'ble Central Commission may suspend the operation of the PPAs till the final disposal of the Application;
e) pass such further or other orders as the Hon'ble Central Commission may deem just and proper in the circumstances of the case.”
3. The question of jurisdiction of this Commission to adjudicate the dispute raised in the petition was considered as a preliminary issue. The Review Petitioners and GUVNL filed their replies on the question of maintainability. After hearing the parties and considering the pleadings, this Commission by the impugned order upheld its jurisdiction to adjudicate the dispute and admitted the petition for hearing on merits.
4. The Review Petitioners seek review of the impugned order alleging that while deciding the question of jurisdiction, this Commission has not considered the specific arguments made by them in their written submissions dated 24.9.2012 Firstly, the Review Petitioners have denied that they had conceded jurisdiction of this Commission and therefore, according to the Review Petitioners, this Commission incorrectly proceeded to decide the question of jurisdiction when it recorded in paras 10 and 16 of the impugned order a statement to that effect attributed to the Review Petitioners. On the contrary, the Review Petitioners have stated that it was projected on their behalf in the written submissions that the respective State Commissions only had the jurisdiction to decide the dispute raised by Adani Power Ltd. The Review Petitioners have pointed out that no cognisance of this submission made in the written submissions had been taken while deciding the question of jurisdiction. The Review Petitioners have also submitted that in the written submissions they had urged that the petition before this Commission was not maintainable in view the earlier order of this Commission in Petition No. 103/2005 (Uttranchal Jal Nigam Ltd. v. Uttranchal Power Corporation Ltd.), which submission was not considered in the impugned order.
5. Adani Power Ltd. in its reply to the Review Petition has supported the impugned order. It has been stated by Adani Power Ltd. that the impugned order was not passed just based on the concessions made but also contained elaborate discussion of the issues involved and concluded at paras 19 and 20 of the impugned order that Adani Power Ltd. had the composite scheme. According to Adani Power Ltd., the impugned order was based on consideration of the issue of jurisdiction on merits. On this basis it has been submitted that the Review Petition is beyond the scope of Order 47, Rule 1 of the Code of Civil Procedure. In this context Adani Power Ltd. has drawn sustenance from the judgments of the Hon'ble Supreme Court in Thungabhadra Industries Ltd. v. Government of A.P (AIR 1964 SC 1372) and Haridas Das v. Usha Rani Banik [(2006) 4 SCC 78]. To support this Commission's finding that the Review Petitioners had conceded the question of jurisdiction of this Commission to adjudicate the dispute, Adani Power Ltd. has referred to para 8 of the reply filed by the Review Petitioners. Adani Power Ltd. has averred that the impugned order and the order dated 26.3.2006 in Petition No. 103/2005 are distinguishable on facts which aspect the Review Petitioners have failed to appreciate.
6. We have heard the learned counsel for the Review Petitioners and the learned senior counsel for Adani Power Ltd. Learned counsel for the Review Petitioner submitted that review of the impugned order dated 16.10.2012 has been sought on the grounds mentioned in para 11 of the review petition i.e there has been no concession on the issue of jurisdiction on the part of Haryana Utilities and the earlier decisions of the Commission in UJVNL case has not been considered though specifically stated in the written submission. Learned counsel further submitted that as per para 2.4 of the Competitive Bidding Guidelines dated 19.1.2005 issued by Ministry of Power, Government of India, in case of combined procurement where the distribution licensees are located in more than one State, the Appropriate Commission for the purpose of these bidding guidelines shall be the Central Commission. Learned counsel submitted that in this case no combined bidding for procurement has taken place. Learned senior counsel for the Adani Power Limited submitted that the Commission has not decided the issue of jurisdiction on the basis of concession, but on the basis of elaborate discussion of the issue of maintainability as is evident from paras 10, 16, 20 and 23 of the impugned order. Learned senior counsel further submitted that there is no error on the face of the order and the Review Petitioner is rearguing the matter on merits which is not permissible in review. Learned senior counsel submitted that if the Review Petitioner is aggrieved by non-consideration of the orders of the Commission and the judgments of the Appellate Tribunal, the same cannot be a ground for review.
7. We have carefully considered the submissions made on behalf of the parties. The Review Petitioners have questioned the correctness of certain portions of paras 10 and 16 of the impugned order. These paras are extracted hereunder:—
“10. When the petition was initially heard on 19.7.2012, this Commission directed the respondents to file their replies on maintainability. The respondents have accordingly filed their replies. In the replies filed by the respondents it has been conceded that presently Mundra Power Project is having a composite scheme for generation and sale of electricity in more than one State. The respondents have stated that this Commission would have the jurisdiction under clause (f) of sub-section (1) of Section 79 to adjudicate the disputes not affecting the rights and obligations of the parties under the PPAs. GUVNL has stated that this Commission cannot go into the questions already decided by GERC and the Appellate Tribunal. GUVNL has also placed on record the details of certain petitions filed by Adani before GERC seeking redressal of its grievances arising out of the PPAs to show that as per the understanding of Adani itself, GERC had the jurisdiction to adjudicate the disputes under the PPAs.”
“16. From the above contentions of the respondents, it is evident that the dispute raised by Adani is to be decided in accordance with the provisions of the PPAs. The clauses in the PPAs discharge the parties, the petitioner as well as the respondents, of their obligations on occurrence of one or more of the force majeure events. Adani has contended that changes in the terms of the FSA signed with Coal India Ltd. for supply of power to Haryana and promulgation of the Indonesian Regulation which makes the generation of power for supply to Gujarat and Haryana costlier and unviable, are the events of force majeure under the PPAs. In view of Adani's contentions, the question is whether or not the dispute falls within the scope of the force majeure as defined in the PPAs and requires adjudication. Every agreement is subject to laws of the land, the Contract Act being one such law. The Contract Act also discharges the parties of the obligations on the grounds of frustration and impossibility to perform the contract. Therefore, the question that will require adjudication on merits is whether or not Adani stands relieved of its obligation to supply power under the PPAs on ground of frustration in view of the supervening circumstances set out by Adani in the petition. The adjudication of these issues being within the scope of the PPAs, the maintainability of the petition before this Commission on the respondents' own pleas cannot be denied.”
8. The Review Petitioners have objected to the observation in para 10 of the impugned order to the effect that the respondents had conceded that Mundra Power Project (owned by Adani Power Ltd.) was having a composite scheme for generation and sale of electricity in more than one State. The other observation objected to by the Review Petitioners as recorded in the concluding sentence in para 16 of the impugned order is to the effect that the adjudication of the issues raised by Adani Power Ltd. being within the scope of the PPAs, the maintainability of the petition on the respondents' own pleas could not be denied. We proceed to examine the matter.
9. As has been noted above, GUVNL and the Review Petitioners (UHBVNL & DHBVNL) had filed their replies on the question of maintainability of the main petition vide affidavits dated 23.82012 and 22.8.2012 respectively. The relevant portions of the replies are extracted hereunder:—
“4. In terms of section 79(1)(b) of the Electricity Act the Hon'ble Commission can exercise jurisdiction to the extent of composite scheme for generation and sale of electricity in more than one state. Accordingly to the extent the Petitioner seeks to raise issues of composite nature affecting the generation and supply of power in more than one State, outside the PPAs dated 2.2.2007 and 6.2.2007 entered into with GUVNL and PPA dated 7.8.2007 entered into with the Haryana Utilities and without affecting the rights and obligations of the respective parties under these PPAs, the Hon'ble Commission may entertain the said petition for resolving such issues. Such a proceeding before the Hon'ble Commission under Section 79(1)(f) in so far it does not affect the rights and obligations of the parties under the PPAs mentioned herein above, can be considered as matters relating to Section 79(1)(b), namely, in regard to matters connected with the composite scheme for generation and sale of electricity in more than one State.”
(Emphasis added)
UHBVNL & DHBNL (Review Petitioners)
“8. Therefore, in view of the above quoted relevant extracts of the PPA and in view of Section 63 of the Act, it is humbly submitted that the present Petition is not maintainable before this Hon'ble Commission. It is submitted that once the Tariff is adopted under Section 63 of the Act the same is not subject to re-determination of Tariff under Section 62 of the Act. It is further submitted that relief sought by the Petitioner will have to be considered in view of the Terms and Conditions of the PPA dated-7.08.2008. It is humbly submitted that the Petitioner could invoke the Jurisdiction of the Hon'ble Commission under section 79(1)(b) of the Electricity Act, 2003 as a composite scheme only for issues which are not squarely covered under the Terms and Conditions of the PPA with the Answering Respondent. It is further submitted that this Hon'ble Commission has jurisdiction on matters which concerns the Petitioner qua its multiple PPA's.”
(Emphasis added)
10. We have extracted part of the reply of GUVNL since learned counsel who appeared for both GUVNL and Haryana Utilities had argued the question of maintainability on behalf of GUVNL and subsequently adopted the same while making submissions on behalf of the Review Petitioners. From the extracts of the replies of GUVNL and the Review Petitioners it is observed that their contention on the question of maintainability inter-alia was that this Commission would have jurisdiction under clause (b) of sub-section (1) of Section 79 of the Electricity Act in regard to matters covered under the composite scheme. This Commission exercises jurisdiction under clause (b) of sub-section (1) of Section 79 of the Electricity Act in respect of a generating company, other than a generating company owned or controlled by the Central Government, if such generating company has a composite scheme for generation and sale of electricity in more than one State. The existence of the composite scheme is a condition precedent for exercise of jurisdiction in respect of the matters, within or outside the scope of the PPAs, under clause (b) of sub-section (1) of Section 79 of the Electricity Act. The Review Petitioners consented to exercise of jurisdiction by this Commission under clause (b) of sub-section (1) of Section 79 of the Electricity Act on the ground of existence of the composite scheme. Therefore, there is no error apparent on the face of record in para 10 of the impugned order.
11. The observation of this Commission in para 16 of the impugned order is based on para 6 of the reply filed vide affidavit dated 22.8.2012 by the Review Petitioners which is extracted below:—
“6. At the very outset it is humbly submitted that the present relief sought by the Petitioner is to be addressed strictly in accordance with the Terms and Conditions of the PPA dated 07.08.2008. …”
In view of the above submissions, this Commission categorically observed in the impugned order that the questions raised in the petition were to be considered in accordance with the PPAs signed between the parties.
12. The observations in paras 10 and 16 of the impugned order have been made after due consideration of the reply filed by the Review Petitioners. Even if, for sake of argument, it is accepted that some other view of the portions of the reply extracted above was also a possible view, it cannot be the legitimate ground for review of the impugned order. The matter cannot be reargued on merits in the garb of review proceedings whose scope is limited to the grounds enacted in Order 47, Rule 1 of the Code of Civil Procedure, 1908.
13. Now we consider the second ground raised by the Review Petitioners in support of their plea for review. The ground is that this Commission while passing the impugned order has not considered the binding precedents, the judgment the Appellate Tribunal as also this Commission's own orders. We discuss the judgments/orders relied upon by the Review Petitioners one by one to ascertain whether the view taken therein was at variance with the view taken in the impugned order.
14. Learned counsel for the Review Petitioners during the course of his oral submissions based his arguments on the following observations of the Appellate Tribunal in the judgment dated 23.11.2006 in Appeal No. 228 of 2006 (PTC India Ltd. v. CERC):—
“56. What has been contemplated or provided for in Section 791(b) is to regulate the tariff of generating companies, if such a contingency arises for fixation of tariff for such generating companies in case of a generating company having a composite scheme of generation and sell electricity in more than one State. This obviously means that when sale of power takes place by the generator and with whom should the said utility/Discom, should have a uniform purchase price for such Discoms/utilities, the legislature has enabled the Central Commission to regulate the tariff of such generating companies and not otherwise.”
15. In our view, reliance by the Review Petitioners on the judgment of the Appellate Tribunal is misplaced. The view taken by this Commission in the impugned order is rather supported by the judgment of the Appellate Tribunal than sustaining the plea of the Review Petitioners. The ratio of the Appellate Tribunal's judgment is that this Commission regulates the tariff of the generating companies which sell power to the distribution companies etc. at uniform rate. It needs to be borne in mind that where the rates for sale (tariffs) have been discovered through competitive bidding processes initiated by two or more States independently of each other and at different times, the possibility of sale at uniform rates cannot be a reality. Such a possibility is extremely remote. However, what seems to have been emphasized by the Appellate Tribunal is the uniformity of approach on the issues related to tariff common to more than one State. The Appellate Tribunal further seems to have ruled that in such matters this Commission is conferred with the exclusive jurisdiction to avoid conflicting opinions by the different State Commissions. The observation of the Appellate Tribunal flows from the fact that the Parliament has invested this Commission with the powers of regulation in the matters of common interest. In the present case, the issue involved for decision is common to both the States being supplied power by Adani Power Ltd. from a single generating station, that is, whether Adani Power Ltd. is entitled to any relief to neutralize the impact of increase of prices of coal being imported from Indonesia and if so, to what extent. The issue deserves a uniform approach in keeping with the philosophy of the Electricity Act. This Commission was conscious of the need for common approach when at para 23 of the impugned order it observed as under—
“Any other interpretation will also impinge on the policy of common approach on the matters of tariff of the generating companies supplying electricity to more than one State enshrined in clause (b) of sub-section (1) of Section 79.”
16. We may also point out that the Appellate Tribunal in its above judgment has interpreted the scope of clause (b) of sub-section (1) of Section 79 of the Electricity Act, 2003 in the following words:—
“40. On an analysis of Section 79(1)(b), in respect of generating companies other than those owned or controlled by Central Government falling under section 79(1)(a), if a generating company enter into or otherwise has a composite scheme for generation and sale of electricity in more than one State, the fixation of tariff may arise in the hands of Central Commission. If the sale is within the State by the generator, then it follows that the Central Commission has no jurisdiction. If the generating company enters into or otherwise has composite scheme for generation and sale, in more than one state then the Central Commission may regulate the tariff of such generating company. In this respect it is useful to refer to specific stand taken by the 1st respondent in its reply, which would go to show that the 2nd respondent is at liberty to establish a generating station and sell power to any licensee including electricity traders or a consumer in accordance with Section 10 of the Act, in which case the comfort of “in principle acceptance” of the project capital cost as per order dated 02.08.2006 will not be available and tariff will be determined in accordance with law applicable at the time of commercial operation of the generating station.”
17. The Appellate Tribunal has held that when the sale by a generating company is within the State, this Commission has no jurisdiction. The Appellate Tribunal has further held that if the generating company enters into or otherwise has the composite scheme for generation and sale of power in more than one State, this Commission has jurisdiction to regulate the tariff. This Commission, as a consequence of an elaborate discussion in the impugned order has held that Adani Power Ltd., as a generating company, has the composite scheme for generation and sale of electricity in more than one State and accordingly, is amenable to jurisdiction of this Commission under clause (b) of sub-section (1) of Section 79 of the Electricity Act, 2003. When seen in the light of the judgment of the Appellate Tribunal as a whole, we find that there is no conflict between the judgment and the impugned order.
18. The Review Petitioners in their written submissions referred to the order dated 29.3.2006 in Petition No. 103/2005. At the hearing learned counsel for the Review Petitioners drew this Commission's attention to the following paras of the said order dated 29.3.2006:—
“28. A regards the interpretation of the expression “composite scheme” as provided in clause (b) of sub-section 1 of section 79(1)(b) of the Electricity Act, 2003, although the expression has not been defined in the Act, the Commission is of the view that ‘composite scheme’ is one in which a generating station is originally conceived for the purpose of meeting the power requirements of more than one State. The generating station could be set up in one State but the beneficiaries would be pre-identified and be in more than one State. Traditionally the central generating stations have been set up as ‘composite scheme’. Such generating stations had, at their very inception, inter-State beneficiaries identified and consequently the sale from such stations involved more than one State.
29. In this context, it would be relevant to discuss the general approach to grant of jurisdiction of the CERC across the Act and also specifically, in the context of the two clauses (a) and (b) of sub-section (1) of section 79(1) of the Act. The basis of CERC's jurisdiction is ‘inter-State’ operation. Under clause (a) of sub-section (1) of section 79 of the Act, thus the powers of fixation of tariff of Central Government owned generating companies were vested in CERC largely because such generating stations were inter-State in nature, with clearly identified beneficiaries, from the very beginning, in more than one State. Clause (b) of sub-section (1) of section 79 of the Act is a complementary provision for clause (a) of the said section, with the difference that clause (a) covers the Central Government owned generating stations while clause (b) covers primarily private projects. This follows that the expression ‘composite scheme for generation and sale of electricity in more than one State’ in clause (b) of sub-section (1) of section 79(1) of the Act should be interpreted to mean a composite scheme on lines of central generating companies where the generating stations were envisaged from the very beginning to have generation and sale in more than one State.
30. It also follows from the above that a composite scheme is an inter-State scheme under which tariff applicable to all the beneficiaries of a project would also be the same. However, in the case of five inter-state hydro plants of UJVNL in question, it has been submitted by the petitioner in its affidavit dated 19.12.2005 that the agreement specifies that UJVNL will supply 25% of the electricity generated in Dhakrani, Dhalipur, Chibro and Khodri plants and 20% of the electricity generated in Kulhal plant to HPSEB at costs, i.e excluding returns (excluding cost of servicing debt, return on equity and taxes). Hence the electricity supplied to HPSEB is at a lower rate than that for UPCL”
31. In our opinion therefore, the hydro-stations in question do not qualify to be a ‘composite scheme’, as required under clause(b) of sub-section (1) of section 79(1)(b) of the Act.”
19. In the above case, certain hydro power generating stations were established in the unified State of Uttar Pradesh based on an agreement dated 21.11.1972 between the State Governments of Uttar Pradesh and Himachal Pradesh. Under the Agreement, the State Government of Himachal Pradesh was given a fixed percentage of share in the electricity generated at the cost of generation in lieu of utilization of waters contributed partly from the catchment areas in Himachal Pradesh. The arrangement for supply of electricity to the State of Himachal is akin to barter arrangement. The Commission took into account the fact that the power was being supplied at the cost of generation which was at rates lower than the rates at which power was being supplied to the State of Uttar Pradesh originally and subsequently the State of Uttranchal (now Uttrakhand). This Commission found that supply of electricity to the State of Himachal Pradesh did not involve “sale” as it was in exchange of the rights relinquished by the State of Himachal Pradesh in the catchment areas. In view of the peculiar facts of that case, this Commission held that the generating stations in question were not covered under the composite scheme for generation and sale of electricity in more than one State. It also bears notice that the said order dated 29.3.2006 proceeds on the premise that the Central generating stations are envisaged to have generation and sale in more than one State from the very beginning. It is, however, a matter of common knowledge that a number of generating stations owned by NTPC Ltd., a Central Government undertaking, supply power to one State, for example, Faridabad TPS in Haryana, Simhadari TPS in Andhra Pradesh, etc. In the Central sector too there are generating stations such as Kayamkulam Combined Cycle Power Project, which were originally conceived for supply of power to one State but over a period of time have started supplying power to more than one State. Therefore, the very factual basis considered in the order of 29.3.2006 is not beyond a reasonable doubt. It is also to be noted that the said order confines its discussion in the context of the “generating station” and not in the context of “generating company”, as per clause (b) of sub-section (1) of Section 79 of the Electricity Act. For the purpose of examination of the question of jurisdiction, this Commission has to consider the generating company as a whole, and not the individual generating stations in view of clause (b) of sub-section (1) of Section 79 of the Electricity Act. In case of Adani Power Ltd. it is on record that as a generating company it has established and is in the process of establishing generating stations in different States. Therefore, Adani Power Ltd. as a generating company is amenable to jurisdiction of this Commission by virtue of clause (b) of sub-section (1) of Section 79 of the Electricity Act. In view of the peculiar facts of the earlier case, the Review Petitioners cannot draw any sustenance from this Commission's order dated 29.3.2006 ibid.
20. Learned counsel for the Review Petitioners then referred to order of this Commission dated 16.5.2012 in Petition No. 20/2012 (GMR Kamalanga Energy Ltd. v. Grid Corporation of Orissa Ltd.). The petitioner, GMR-Kamalanga Energy Limited had filed the petition under Section 62 and clause (b) of sub-section (1) of Section 79 of the Electricity Act for approval of provisional tariff for sale of electricity to Grid Corporation of Orissa for first phase of 3 × 350 MW Kamalanga Thermal Power Plant. This Commission after considering the scope of clause (b) of sub-section (1) of Section 79 and clause (a) of sub-section (1) of Section 62 noted that this Commission would have the jurisdiction to determine the tariff of the generating company/generating stations which have a composite scheme for generation and sale of electricity in more than one State to distribution licensees. This Commission declined to approve the provisional tariff in that case since the sale by the petitioner was in one State, the State of Odisha. As the petitioner therein had urged that it was to supply power to other States as well, this Commission granted liberty to the petitioner to approach this Commission for determination of tariff of the generating station when the petitioner entered into or otherwise had a composite scheme for generation and sale of electricity to the distribution licensees in more than one State. The concluding para of the order is extracted below:—
“19. In the circumstances, the present petition is dismissed as not maintainable with liberty to file an appropriate application before this Commission for determination of tariff of the generating station as and when the petitioner enters into or otherwise has a composite scheme for generation and sale of electricity in more than one State to distribution licensees.”
(Emphasis added)
21. This Commission thus, while making the order dated 16.5.2012 ibid was clearly of the opinion that a generating company could enter into or have the composite scheme at any stage, even subsequent to commissioning of a part of the generating station and that it was not necessary for the generating company to have the composite scheme from the beginning. In the ultimate conclusion there is no inconsistency between the decisions arrived at in the order dated 16.5.2012 ibid and the impugned order and the two orders are in complete harmony.
22. Lastly, learned counsel for the Review Petitioners referred to the order of this Commission dated 11.1.2010 in Petition No. 109/2009 filed by Torrent Power Ltd. The specific portion of the order on which reliance was placed is extracted under.
“8. We are of the view that the non-operationalisation of PPA between the petitioner and respondent Nos. 3 and 4 with regard to the fulfilment of conditions of PPA/PSA or the scheduling of MP's share of power is outside the scope of the present petition which has been filed for determination of tariff of the generating station which needs to be decided as per the terms and conditions of the PPA/PSA. It is however observed that under section 79(1)(b) of the Electricity Act, 2003, this Commission has been vested with the function to regulate the tariff of the generating company other than those owned and controlled by the Central Government if such generating company enter into or otherwise have a scheme for generation and sale of electricity in more than one State. In order that the tariff determined by this Commission remains applicable to the generating station, it is necessary that the petitioner should take necessary steps to maintain its inter-State character as provided in the Act.”
23. In the above case, Torrent Power Ltd. was supplying electricity to more than one State, these States being the State of Gujarat and the State of Madhya Pradesh when it approached this Commission for approval of tariff. There is nothing in the above order to suggest, even remotely, that the decision therein is at variance with the decision in the impugned order. This Commission has not deviated from the binding view of the Appellate Tribunal or its own previous orders while deciding the question of jurisdiction by the impugned order.
24. In view of the above discussion, we conclude that there is no error of fact or law, apparent on the face of record. We do not find any justification for review of the impugned order. Accordingly, the review petition is devoid of merits and is accordingly dismissed.
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