Central Electricity Regulatory Commission

b) Order dated 14.08.2018 in Appeal No. 111 of 2017 - GMR Warora -v- Central Electricity Regulatory Commission and Ors.

c) Judgment dated 21.12.2018 passed by Honble Appellate Tribunal of Electricity in Appeal No. 193 of 2018 - GMR Kamalanga Energy Limited and Anr. v- Central Electricity Regulatory Commission and Ors. Petition No. 342/MP/2018 & 343/MP/2018 Page 36 of 75

d) Order dated 05.02.2019 passed by the Commission in Petition No.187/MP/2018 and Batch in the matter of M/s. Renew Wind Energy (TN2) Private Limited v- NTPC Limited. Re: Inadmissibility of carrying cost

71. The Respondent No.1 has submitted that there is no provision in the PPA regarding carrying cost or interest for the period till the decision of the Commission acknowledging the change in law and deciding on the amount to be paid for such change in law namely provide for relief for the same, as specified in Article 12.2.2 of the PPA. The Change in Law claim of the Petitioners is yet to be adjudicated and the amount if any, due to the Petitioners have to be determined/computed first. Thereafter, only after the amount is determined, are the Petitioners required to raise a Supplementary invoice for the amount so computed as per Article 10.7 of the PPA. It is only in case of default on the part of SECI in not making the payment by the due date as per supplementary invoices, the issue of Late Payment Surcharge would arise i.e. for the period after the due date. The reference in Article 12.2.2 as regards the Commission deciding on the date from which the change in law will be effective, refers to the principal amount to be computed from the date on which change in law comes into force and not to the payment of interest and carrying cost.

72. The Respondent No.1 has submitted that the provision of Article 10.3.3 of the PPAs dealing with late Payment Surcharge and definition of the Due Date in Article 1 read with Article 10.3.1 of the PPA are relevant. The due date is the forty-fifth (45 ) day after a Monthly Bill or a Supplementary Bill is received and duly accepted by the Answering Respondent, if such day is not a Business day, the immediately succeeding Business Day, by which date such Monthly Bill or Supplementary is payable by SECI. In case the Monthly Bill or any other bill, including a Supplementary Bill is issued after the (fifteenth) 15th day of the next month, the Due Date for payment would be (fifth) 5th day of the next month to the succeeding Month. The supplementary bill needs to be raised by the SPD for the adjustment of the Change in Law after the Change in Law claim is approved by the Commission. There cannot be any claim for late payment surcharge for the period prior to the due date. The Respondent No.1 has placed its reliance on the judgment of the Appellate Tribunal in SLS Power Limited Petition No. 342/MP/2018 & 343/MP/2018 Page 37 of 75 -v- Andhra Pradesh Electricity Regulatory Commission and Others (Appeal No. 150 of 2011) and Batch.

73. The Respondent No.1 has submitted that further, the PPAs do not have a provision dealing with principle of restoration to same economic position. Therefore, the Petitioners are not entitled to claim relief which is not provided for in the PPA. The Respondent No.1 has placed its reliance on the following Judgments: a. The Appellate Tribunal vide judgment dated 13.04.2018 in Appeal No. 210 of 2017 in Adani Power Limited v- Central Electricity Regulatory Commission and Ors., wherein it was held that since the Gujarat Bid-01 PPA has no provision for restoration to the same economic position. Therefore, the carrying cost will not be applicable b. The Appellate Tribunal vide judgment dated 14.08.2018 in Appeal No. 111 of 2017 in M/s. GMR Warora Energy Limited v- Central Electricity Regulatory Commission and Ors., held that if there is a provision in the PPA for restoration of the Seller to the same economic position as if no Change in Law event has occurred, the Seller is eligible for carrying cost for such allowed Change in Law event(s) from the effective date of Change in Law event until the same is allowed by the appropriate authority by an order/ judgment. c. Order dated 09.10.2018 in Petition No. 188/MP/2017 and Batch in Acme Bhiwadi Solar Power Private Limited v- Solar Energy Corporation of India and Ors. Batch, the Commission re-iterated the aforementioned findings of the Tribunal. d. Commissions Order dated 05.02.2019 in Petition No.187/MP/2018 and Batch in the matter of M/s. Renew Wind Energy (TN2) Private Limited v- NTPC Limited Batch.

74. The Respondent No.1 has submitted that the present case is not a case of amounts being denied at appropriate time or any deprivation of amount due to actions of the procurers. The Procurers cannot make the payment for change in law until the amount is determined by the Commission. The decision by the Commission can only be after the Petitioners have submitted complete information and not before. Thus, any delay in the determination of the impact of change in law is on account of the Petitioners. Accordingly, the carrying cost admissible (if any) to the Petitioners shall be from the date of furnishing of the complete Petition No. 342/MP/2018 & 343/MP/2018 Page 38 of 75 prescribed information. Any adverse consequences for not approaching this Commission with the full documentation/ information at the first instance, ought to be borne by the defaulting party i.e. the Petitioners themselves. Re: Allegation of allowing Carrying Cost under the Business Efficacy

75. The Respondent No.1 has submitted that it is a settled law that terms cannot be implied into a contract, contrary to the express terms of the PPAs. Thus, if the PPAs already contemplate for the provision of Late Payment Surcharge for the delay in payment of the bill, supplementary or otherwise (as stated above), then by no stretch can it be said that the intent of the PPA was to restore/restitute the parties to the same economic position in case of such contingency. Thus, if one event was specifically provided in the PPA and other event is excluded, it clearly indicates that the events which are not included are not to be considered. Further, in the case of Sumitomo Heavy Industries Limited v ONGC Limited (2010) 11 SCC 296 the Honble Supreme Court had only opined that the Award given by the Arbitrator is a possible view and cannot be said to be either a law on the admissibility of interest or a precedent on the above aspect. Incidentally, even in the Nabha case (as relied on by the Petitioners), the interest was granted only from three months after the decision of the Honble Supreme Court and not before.

76. The Respondent No.1 has submitted that in matters of contract, relief cannot be granted on principles of equity. The contract becoming onerous is not a ground for relief to be granted. Reference in this regard may be made to the following judgments:

a) Alopi Parshad and Sons Ltd. v. Union of India, (1960) 2 SCR 793: AIR 1960 SC 588 wherein it was held that the Indian 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 different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate - a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet, this does not in itself affect the bargain they have made.

b) Naihati Jute Mills Ltd. v. Khyaliram Jagannath, (1968) 1 SCR 821: AIR 1968 SC 522 wherein it was held that where the contract makes provision (that is, Petition No. 342/MP/2018 & 343/MP/2018 Page 39 of 75 full and complete provision, so intended) for a given contingency it is not for the court to import into the contract some other different provisions for the same contingency called by different name. In such a case the doctrine of discharge by frustration cannot be available, nor that of an implied term that the existing state of affairs would continue at the date of performance. The reason is that where there is an express term the court cannot find on construction of the contract an implied term inconsistent with such express term.

77. The Respondent No.1 has submitted that the business efficacy rule can be considered as a part of interpretative rule only where the provision is vague and cannot be relied upon to create a substantive right in favour of the Petitioners. Re.: Allegation of allowing carrying cost under the principle Quantum Meriut

78. The Respondent No.1 has submitted that the Petitioners have also raised the issue of applicability of Section 70 of the Indian Contract Act, 1872 namely that when a person does or delivers something to another without intending to do so gratuitously, he is entitled to receive compensation for the thing or restoration of the thing delivered if the other party has enjoyed the benefit of the thing done or delivered. Quite apart from the fact that compliance with the prevailing law (Safeguard Duty) is not a thing done or delivered to SECI, the principle has no application where there is a specific agreement in operation. Quantum Meruit has application when the contract is held to be invalid. Further, the principle of Quantum Meruit has to be specifically pleaded. Reference in this regard may be made to the following extracts from Pollock and Mulla, Fourteenth Edition (Vol II), which reads as under: Quantum Meruit The principle of quantum meruit is often applied where for some technical reason a contract is held to be invalid. Under such circumstances an implied contract is assumed, by which the person for whom the work is to be done contracts to pay reasonably for the work done, to the person who does the work. The provisions of his section are based on the doctrine of quantum meruit, but the provisions of the Contract Act admit of a more liberal interpretation; the principle of the section being wider than the principle of quantum meruit. The principle has no application where there is a specific agreement in operation. A case based on quantum meruit must be pleaded. Petition No. 342/MP/2018 & 343/MP/2018 Page 40 of 75 Re.: Claims, if any allowed to SPDs, should be recovered on Back to Back basis from the Respondent no.2 to 4

79. The Respondent No.1 has submitted that the PPAs have been entered into by SECI in its capacity as an intermediary company for the bulk purchase of electricity from the Petitioners for bulk supply of electricity to the Respondent No.2 to 4, Distribution licensees under PSAs. Such purchase and resale of electricity is under a scheme envisaged under NSM scheme. SECI is in a position to discharge its obligations under the PPA including the payment for any change in Law implication etc. only upon the distribution licensees remitting the amount to the SECI in terms of the respective PSAs. The obligation of the distribution licensee under the PSAs is therefore on a back to back basis with the obligation of the SECI to the Petitioner. The Respondent No.1 has placed its reliance on Order dated 09.10.2018 in case of Acme Bhiwadi Solar Power Private Limited v- Solar Energy Corporation of India and Ors. Batch. and Order dated 05.02.2019 in Petition No.187/MP/2018 and Batch in the matter of M/s. Renew Wind Energy (TN2) Private Limited v- NTPC Limited Batch.

80. The Respondent No.1 has submitted that in the circumstances mentioned above, the objections raised by the SPD are irrelevant and without any merit. Written Submissions of Respondents No. 2 to 4 Distribution Companies in the State of Rajasthan

81. The Respondent DISCOMS have submitted that the Petitioners have made the following broad claims in its Petition: a. Imposition of Safeguard Duty; b. Interest on Working Capital/Return on Equity; c. Carrying Cost. Re: Imposition of Safeguard Duty

82. The Respondent DISCOMS have submitted that in terms of the Statutory Notification dated 30.07.2018, safeguard duty becomes payable on import of solar cells whether or not assembled in modules or panels. Therefore, the imposition is on the importer of the Solar Cells if such import is on or after the date of notification i.e. 30.07.2018. The Petitioners are Petition No. 342/MP/2018 & 343/MP/2018 Page 41 of 75 not procuring the solar cells from any imported sources, but is procuring from its own group company. The Petitioners have stated in their Petitions that they have engaged one ACME Cleantech Solutions Pvt. Ltd. as its contractor for supply of goods and executed an Agreement for Supply of Goods dated 15.02.2018. Therefore, the Petitioners have no agreement for import of solar cells or even for use of imported solar cells. The imposition of assessment of this tax is therefore not even on the Petitioners, but on the importer of Solar Cells. The increased cost for the Petitioners is only in terms of the commercial agreement entered into by the Petitioners for purchase of the Solar Cells. The difference is between the liability under law and mere commercial arrangement. In the case of the Petitioner, it is the latter and therefore, no claim for change in law is made out before the Commission. The terms of this agreement are subject to negotiation between the parties. It is settled law that an increase in cost by virtue of the terms of a commercial agreement cannot by any stretch of imagination be a change in law.

83. The Respondent DISCOMS have submitted that the validity of the claim of the Petitioners with regard to Change in Law is required to be considered within the scope of Article 12 of the PPAs dealing with the Change in Law. The Petitioners have quoted an all-inclusive tariff which has been incorporated under the PPAs, and further the PPAs having been accepted and signed by the parties is a binding document, and no claim can be made by the Petitioners de- hors the provisions of the PPAs. Article 12 of the PPA deals with the implication of occurrence of any Change in Law event mentioned therein after the effective date (i.e.16.09.2017), to be allowed to the Developer as per the conditions contained in the said Article. Article 12 recognises only certain events as Change in Law and not every change in law. Article 12 of the PPAs comes into play only when the additional expenditure is incurred on account of an occurrence of Change in Law event as mentioned therein. Therefore, if the expenditure is incurred for a reason other than occurrence of the Change in Law event, Article 12 does not come into the picture at all, and no relief could be claimed under the same. Therefore, the Commission has to adjudicate upon: a. Whether the imposition of Safeguard Duty is a change in law event for the purposes of Article 12 and the qualifications set out therein; and Petition No. 342/MP/2018 & 343/MP/2018 Page 42 of 75 b. Whether the additional expenditure (if at all) incurred is on account of occurrence of the alleged Change in Law event, and not due to any other fault of the developer or any other entity such as the EPC contractor;

84. The Respondent DISCOMS have submitted that the claim of the Petitioners with regard to imposition of Safeguard Duty fails in both the above aspects under Article 12 of the PPA. RE: Imposition of Safeguard Duty as a Change in Law event under Article 12 of the PPA.

85. The Respondent DISCOMS have submitted that in terms of Article 12, for any relief being claimed by the Petitioners under Change in Law, it is to be demonstrated beyond doubt that the Change in Law event is one that is admissible under Article 12 and the qualifications set out therein. There are three legal implications of the provision under Article 12 in respect of taxes, which are summarized as under:

a) The Change in Law definition in Article 12.1.1 is exhaustive in nature and not inclusive, on account of use of the expression means.

b) Tax is specifically dealt with only under the sixth bullet and therefore other five bullets have to be interpreted to deal with aspects other than taxes.

c) The fifth bullet specifically restricts tax to only tax on setting up of Solar Power Project and supply of power. Therefore, tax on any other event other than setting up of Solar Power Project and supply of power is not covered by the Change in Law clause.

86. The Respondent DISCOMS have submitted that with regard to any taxes, duties etc., the relevant entry is the sixth bullet of the Change in Law clause. Taxes also cannot form part of any other entry in the Change in Law clause. This is based on the basic and well settled principles of interpretation of deeds and documents, whether interpretation of statutes or interpretation of contracts. The Petitioners have contended that the imposition of safeguard duty is on solar modules which are the primary component in the setting up of a solar plant, and therefore to that extent the change in tax would tantamount to an increase in tax on setting up of the solar power plant. The contentions of the Petitioners in this regard are misconceived, as the incidence of safeguard duty is not on the event of setting up of a solar Petition No. 342/MP/2018 & 343/MP/2018 Page 43 of 75 power plant, but is on transaction of import of solar modules. The provision under the PPAs explicitly deals only with the event of setting up of solar power plant, and not on a tax on any input for setting up the plant. Similarly, the incidence of Safeguard Duty is also not on Supply of Power. It also not correct for the Petitioners to contend that the imposition of Safeguard would be a tax on input costs in the process of supplying power. For a claim to be admissible under Article 12, the tax incidence either has to be on the event of setting up of Solar Power Project or on the event of supply of power, and not on any input for either setting up the plant or supplying power.

87. The Respondent DISCOMS have submitted that the definition of supply as defined in the Electricity Act, 2003 is required to be used for the purpose of the sixth bullet in Article 12.1.1 of the PPA. The term supply in Article 12.1.1 Sixth Bullet means sale of electricity. Therefore, what is covered in the PPAs for Change in Law in respect of taxes is only tax for setting up a Solar Power Plant and supply (sale) of electricity and not taxes for anything else. In the present case, the imposition of Safeguard Duty in terms of the Statutory Notification is admittedly only on the event of import of Solar Cells/modules. The change in price of Solar Cells/Modules is only a change in input price, which is not covered under the Change in Law clause. The Petitioners have wrongly placed its reliance on the order of the Commission in the case of ACME Bhiwadi Solar Power Private Limited v. SECI dated 09.10.2018 since the same deals with the change in law event namely, GST Laws. The Petitioners cannot seek parity in the present case of Safeguard Duty with a case dealing with GST Laws as the change in law event. Further, judgment of the Appellate Tribunal dated 14.08.2018 in Appeal No. 111 of 2017 in M/s. GMR Warora Energy Limited v. Central Electricity Regulatory Commission and Ors. have not attained finality, and is currently pending adjudication before the Honble Supreme Court in Civil Appeal No. 11910/2018. Therefore, the reliance placed on the order of the Commission dated 09.10.2018 is misplaced.

88. The Respondent DISCOMS have submitted that the Petitioners have alternatively argued that taxes could also form part of the first bullet i.e. the enactment, coming into effect, adoption, promulgation, amendment, modification or repeal, as there is no restriction that the sixth bullet overrides the first bullet. The contention of the Petitioners in this regard is Petition No. 342/MP/2018 & 343/MP/2018 Page 44 of 75 misconceived since such an interpretation would render the sixth bullet otiose and redundant. There was no need to then have a specific bullet dealing with tax.

89. The Respondent DISCOMS have submitted that the Petitioners have sought to argue that the concept of Change in Law is a principal of restitution and equity, and that therefore an equitable interpretation is to be made. The contention of the Petitioners is fundamentally flawed. Having entered into PPAs, which is a binding contract, the Petitioners cannot seek any relief under equity. It is settled law that there is no equity in contracts, and that the rights and liabilities of the parties are strictly governed by the terms of the contract.

90. The Respondent DISCOMS have submitted that provision under the PPA is crystal clear and that the change in tax is circumscribed by certain qualifications which necessarily have to be read and given meaning to therefore the rule of Contra Proferentem is not applicable.

91. The Respondent DISCOMS have submitted that in view of the above the imposition of Safeguard Duty is not a Change in Law admissible under Article 12 of the PPA. RE: Additional expenditure whether on account of imposition of Safeguard Duty or delay by EPC Contractor.

92. The Respondent DISCOMS have submitted that Article 12 itself does not come into play in the present case, as the additional expenditure being incurred by the Petitioners (if at all) is in fact on account of a delay in importing the Solar Cell modules, and the same would not have been applicable had the delay not taken place. In this regard the Commission and the Appellate Tribunal have consistently taken the view that even under the plenary powers available to the Commission under Section 62 of the Electricity Act, 2003, any fault of the executing entity or of its contractor ought to be dealt contractually between them, and that the impact of such fault could not be passed on to the consumers in the tariff. Therefore, under Section 63, especially when the developer has taken a commercial risk and quoted an all- inclusive tariff, he cannot claim a relief from the consumers, if there is a delay which otherwise ought to be dealt with contractually with the contractor. The reliance is placed on the following judgments of APTEL / Commission:- a. Order dated 26.05.2015 in Petition No. 257 / 2010 passed by the Commission and Petition No. 342/MP/2018 & 343/MP/2018 Page 45 of 75 b. Judgment dated 05.05.2015 in Appeal No. 129 of 2014 PGCIL v CERC &Ors

93. The Respondent DISCOMS have submitted that in the present case, while the Safeguard Duty has been imposed vide Statutory Notification No. 01/2018 dated 30.07.2018, the effect of the same is only prospective. The Petitioners have placed on record along with its Petition the agreement dated 15.02.2018 that it has entered into with ACME Cleantech for supply of the said Solar Modules. The terms of the contract and the subsequent conduct of the Petitioners clearly shows that the Petitioners by way of the present Petitions are only seeking to gain from its own wrong. In terms of the given schedule the equipment was to be ordered not later than 01.05.2018, and delivered not later than 09.06.2018. Further, even the Construction and Commissioning dates in terms of the above schedule were to be prior to the notification dated 30.07.2018. Therefore, the additional expenditure that the Petitioners are claiming to have incurred is in fact on account of a delay in performing the obligations as per the timeline given in the schedule of the Agreement. Further, the Agreement also envisaged the situation of delay or non-adherence to the timelines as per the schedule. Article 11.2 of the Agreement clearly provides that any increase in taxes/duties on account of the delay attributable to the supplier i.e. ACME Cleantech shall be to the account of the supplier. On the other hand, if the delay is on account of the Petitioners, the same has to be borne by the Petitioners itself. This is also in consonance with the principle that has been consistently upheld by this Commission as well as the Appellate Tribunal, that such delays and the consequences shall not be passed on to the consumers, but are to be contractually dealt with by the generator.

94. The Respondent DISCOMS have submitted that the Petitioners have made the following broad submissions: a. Relief under Article 12 of the PPA is not to the exclusion of any other remedy that may be available under different contractual agreement; b. Since the agreement with ACME Cleantech is solely an agreement for supply of modules, the date of commissioning and other dates are not relevant and are superfluous; Petition No. 342/MP/2018 & 343/MP/2018 Page 46 of 75 c. The dates given in the schedule were tentative dates which are prior to the date of agreement, and therefore irrelevant and never factually possible. d. The schedule in Annexure 2 was subsequently amended vide supplementary agreement dated 20.02.2018;

95. The Respondent DISCOMS have submitted that if there is a delay or any deviation from the schedule given in Annexure 2 of the EPC agreement, it cannot be left to the Petitioners to claim the impact of the same from the consumers, when the same necessarily ought to be paid by the defaulting party. While the Petitioners have not even provided any tangible information regarding when the Solar Modules were actually imported or when the commissioning actually took place, for the Safeguard Duty to impact the Petitioners. It is clear that there has been a delay in performing of obligations under the EPC agreement. This being the case, it is not open to the Petitioners to now contend that even though there is a delay or default under its EPC agreement, the impact of the same it would claim under the PPA from the consumers. It is clear that the EPC agreement has been entered into by the Petitioners with its sister concern, and that the Petitioners are now only seeking to pass on the liability of its sister concern to the consumers.

96. The Respondent DISCOMS have submitted that the Petitioners have sought to make an impression that the agreement with ACME Cleantech was for the sole purpose of supply of solar modules, and that dates for commissioning, construction etc. under the schedule are irrelevant for this purpose and ought not to be considered. Several clauses of the agreement with ACME Cleantech show that the agreement was not only for supply of modules, but the obligation went up to even commissioning the plant. In fact, in terms of the Agreement the final acceptance by the Petitioners is only after the commissioning test is done. Therefore, it does not lie in the mouth of the Petitioners to now contend that all other dates other than ordering and delivery of equipment are irrelevant and superfluous. In this regard, the Respondent DISCOMS have drawn attention to following clauses of the Agreement dated 15.02.2018: 1.1 DEFINITIONS Petition No. 342/MP/2018 & 343/MP/2018 Page 47 of 75 Time for Completion Shall mean the time within which completion of the Statement of Supplies as a whole (or of a part of the Statement of Supplies where a separate time for completion of such part has been prescribed) is attained in accordance with the stipulations in the SCC and relevant provisions of the Contract, including Final Acceptance and Annexure

4. TIME FOR COMPLETION Solar Power Generating System comprising of Solar PV Modules including all equipment, associates with the Project under the Scope of the Suppliers shall be completed within the period as specified in Annexure-2. The Date specified in the Final Acceptance Certificate shall be considered as the date of completion of Work/Facilities. 34.6 Applicable Acceptance Tests (e) Commissioning After the completion of trial operation, the Work/Facilities covered under the Contract shall be operated successfully at rated Voltage and available load without any problem/interruption, and a declaration by State Nodal Agency that the conditions specified in 5.1of the PPA have been satisfied or waived has been received by the Owner. 34.8 Final Acceptance 34.8.1 Upon Final Acceptance of the Power Plant, the service Supplier will take over the care, custody and control of the Statement of Supplies. Apart from successful Commissioning, the Supplier shall have followed the required parameters of achieving Final Acceptance.

97. The Respondent DISCOMS have submitted that Article 5.1 of the PPA relates to Synchronization, Commissioning and Commercial Operation. The commissioning test requires the conditions specified under Article 5.1 in the PPA to be satisfied. In view of the above, it is clear that the agreement of the Petitioners with ACME Cleantech is not merely for supply of equipment but includes commissioning of the power plant also, and therefore the dates specified in the Schedule under Annexure 2, have been inserted for a purpose, and are not irrelevant. The Petitioners are seeking to dispute the contents of its own documents which cannot be allowed. The fact that the Petitioners have entered into the agreement on 15.02.2018 does not preclude its sister concern from having started the work earlier. In fact, Petition No. 342/MP/2018 & 343/MP/2018 Page 48 of 75 the date of PPAs signing is also a part of the said schedule which only recognizes the date of PPAs signing. There is no dispute on this date by even the Petitioners. Similarly, the schedule recognizes the other dates agreed upon by the parties for ordering and delivery of equipment. The mere fact that the agreement has been entered into after these dates does not make the dates impossible or irrelevant by any stretch of imagination.

98. The Respondent DISCOMS have submitted that when the said discrepancy in the Petitioners case was pointed out by the Respondents, the Petitioners on 07.02.2019 during the hearing of the matter, for the first time handed over a Supplementary Agreement dated 20.02.2018 which it has allegedly entered into with ACME Cleantech, to revise the schedule and dates in Annexure 2 of the Agreement dated 15.02.2018. The conduct of the Petitioners would show that the supplementary agreement is only an attempt to improve its case after discrepancies have been pointed out by the Respondents. It is also pertinent to note here, that when the said discrepancies in dates was pointed out by Respondent No.1 SECI in its reply dated 27.12.2018, the Petitioners never raised this issue of supplementary agreement in its rejoinder to SECIs reply dated 16.01.2019. The Supplementary Agreement was handed over for the first time only on 07.02.2019 at the time of hearing. The action of the Petitioners in this regard is clearly an afterthought. Further, a perusal of the Supplementary Agreement does not inspire any confidence in the submission of the Petitioner. The supplementary agreement dated 20.02.2018 has been incorporated with a non-judicial stamp paper of Rs.50. In contrast, the agreement for supply dated 15.02.2018 is on an e-stamp paper of Rs. 100. Similarly, the PPA dated 26.09.2017 has also been entered into on an e-stamp paper of Rs.100. There is no reason given in this regard by the Petitioners for using a non-judicial stamp paper of Rs.50 instead of an e-stamp paper as has been used for the original agreement. On pointing out by SECI that the back side of the non-judicial stamp paper had not been provided to show the date on which it had been purchased, the Petitioner has subsequently vide letter dated 25.02.2019 provided the same which shows a stamp of 29 June 2017. Each time a discrepancy is pointed out the Petitioners have brought forward a new document which it never produced earlier. The conduct of the Petitioners therefore attracts adverse inference that the supplementary agreement is only an afterthought. Petition No. 342/MP/2018 & 343/MP/2018 Page 49 of 75

99. The Respondent DISCOMS have submitted that the agreement dated 15.02.2018 stipulates the conditions to be satisfied for undertaking amendment/variation of the said agreement. In this regard, Clause 2 deals with Amendment to the contract and reads as under: 2.0 AMENDMENT TO THE CONTRACT 2.1 No amendment or other variation of the Contract shall be effective unless it is in writing, is dated, expressly refers to the Contract, and is signed by a duly authorized representative of each Party hereto. However in the event of any material amendments prior consent of Lenders shall be obtained before such change is effective.

100. The Respondent DISCOMS have submitted that while handing over the Supplementary Agreement, the Petitioners have not placed anything on record to show that the above provision has been followed. There are grave discrepancies even in the amended dates as per Supplementary Agreement provided by the Petitioners. In terms of the original Agreement dated 15.02.2018, the schedule under Annexure-2 recognized that orders were to be placed starting from 04.10.2017, which would then start getting delivered by 08.11.2017. Further construction would start by 15.11.2017 and finally commissioning would start by 04.05.2018. However, in the supplementary agreement dated 20.02.2018, the Annexure 2 has been amended to state that the Supplier shall complete supplies of 100MW AC by the Commissioning date of the PPA i.e. 16.09.2018. Even regardless of whether the dates provided were correct or not, the Petitioners do not dispute the time envisaged to take to deliver the equipment once it is ordered, and then, further the time would take for commissioning from that point. The schedule shows that there is a time gap of at least one month from the date of ordering to the date of delivery. Further, after delivery it would take almost six (6) months to construct and start commissioning. The said timeline is on the basis of the Petitioners own estimate in the schedule, regardless of the exact dates.

101. The Respondent DISCOMS have submitted that in view of the above, for the Safeguard Duty to have been attracted the equipment ought to have been ordered after 30.07.2018 i.e. the date of imposition. Further, the Scheduled Commissioning Date in terms of the PPA is 16.09.2018. Therefore, even if it was to be assumed without admitting that the dates given in the original schedule in Annexure 2 of the Agreement dated 15.02.2018 were amended or were not correct, it would be practically impossible considering the Petitioners own estimate, Petition No. 342/MP/2018 & 343/MP/2018 Page 50 of 75 to order, get the equipment delivered, and then commission and construct the plant within the timeframe of about 1.5 months i.e. from 30.07.2018 to 16.09.2018.

102. The Respondent DISCOMS have submitted that in view of the above, the imposition of Safeguard Duty is neither admissible as Change in Law event under the PPA, nor is the impact of such imposition on account of such Change in Law, but is only due to failure in performing the obligations under the EPC contract. Re: Purpose of Safeguard Duty

103. The Respondent DISCOMS have submitted that the rationale behind imposition of such safeguard duty is to work as a remedial measure against import of certain articles, to protect the domestic industry, which otherwise may get seriously injured by such import. Allowing such imposition of duty as a pass through would defeat the objective and intent behind it. The reliance has been placed on the orders of the Commission with regard to the claim of Change in Law made by generators on account of Corporate Social Responsibility under the Companies Act, 2013. The Commission has looked at the intent behind the mandate for Corporate Social Responsibility under the Companies Act, 2013, and held that the purpose would be defeated if such responsibility would be passed on to the consumers. Vide Order dated 21.02.2018 in the case of Coastal Gujarat Power Limited v. Gujarat Urja Vikas Nigam Limited it was held as under:- In our view, the expenses towards CSR activities are in the nature of the fulfilment of statutory duty by the Petitioner out of the profit of the company as per the provisions of the Companies Act, 2013. If such expenses are passed on to the consumers, it would defeat the provisions of the Companies Act, 2013 as the expenditure would be met by the consumers and not by the Company out of its profit. Therefore, the claim of the Petitioner for relief under change in law on account of imposition of Mandate of Corporate Social Responsibility is not admissible and accordingly disallowed.

104. The Respondent DISCOMS have submitted that even the Appellate Tribunal has upheld this principle in the case of Distribution Licensees claiming CSR expenditure as part of their ARR. The Appellate Tribunal vide Judgment dated 02.06.2016 in Appeal No. 174 of 2015 Noida Power Company Limited v. UPERC has held that: Petition No. 342/MP/2018 & 343/MP/2018 Page 51 of 75 e. It is very much clear from the relevant extract from Companies Act 2013 that the company should spend, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. f. We are of the considered opinion that if such expenses are passed on to the consumers in the ARR, it would defeat the very purpose. in fact, such expenses are for the social development which should not be passed on to the consumers.

105. The Respondent DISCOMS have submitted that the reliance placed by the Petitioners on the recommendation of the DG Safeguard that the imposition would be a pass through is erroneous. Firstly, the DG Safeguard is not an authority vested with the jurisdiction to hold whether or not the levy of Safeguard Duty could be made a pass through under particular PPAs. The relief in any case ought to be given on a case to case basis, looking at the terms of the PPAs. Therefore, the recommendation of the DG Safeguard does not have any force of law. Secondly, the recommendation of the DG Safeguard itself recognizes that the impact would only be on developers who have entered into PPAs, but have not yet imported the product. Re: Methodology for grant of benefit/relief on account of Change in Law

106. The Respondent DISCOMS have submitted that the Petitioners have the primary and fundamental obligation to place all the relevant material with supporting documents before the Commission in the first instance along with the petitions. It is the duty of the SPDs to satisfy the Commission of the admissibility of the claim. The Petitioners cannot proceed on the basis that it will not give the date of actual import of the solar cells and proceed to claim the amount on some vague and un-substantiated plea. The verification of the documents can be done only if the Petitioners in a transparent manner place material documents along with the petition or in the proceedings before the Commission. Re: Increase in Working Capital and decrease in Return on Equity

107. The Respondent DISCOMS have submitted that the Commission and the Appellate Tribunal have repeatedly upheld that there is no concept of interest on working capital and return on equity in a competitive bidding process. (Reference: The Appellate Tribunal Judgment dated Petition No. 342/MP/2018 & 343/MP/2018 Page 52 of 75 14.08.2018 in Appeal No. 111 of 2017 in the case of GMR Warora v Central Electricity Regulatory Commission and Ors. &Judgment dated 21.12.2018 in Appeal No. 193 of 2018- GMR Kamalanga Energy Limited and Anr. v- Central Electricity Regulatory Commission and Ors.). In view of the above, the claim of the Petitioners for increase in Working Capital and decrease in Return on Equity is misconceived. Re: Carrying Cost

108. The Respondent DISCOMS have submitted that firstly, there is no merit in the principal claim of the Petitioners and therefore the question of payment of carrying cost does not arise. Further, there is no dispute on the fact that there can be no payment until the decision of the Appropriate Commission on change in law. Therefore, amounts do not become due until the decision of the Appropriate Commission. This being the position there can be no claim for Carrying Cost.

109. The Respondent DISCOMS have submitted that the PPAs do not provide for any payment of carrying cost. In the absence of any specific provision for interest, there cannot be any payment for carrying cost. In terms of Article 12 of the PPA entered into between the parties, the relief for Change in Law provided is for the Petitioners to approach the Commission for seeking approval of the Change in Law and the Commission has to acknowledge a Change in Law and pass an Order in regard to the same. Accordingly, the amount due get crystallised only upon the decision being made by the Commission and therefore, there cannot be any carrying cost for the period prior to the decision of the Commission.

110. The Respondent DISCOMS have submitted that the contention of the Petitioners that Change in Law is a principal of restitution and equity is completely misconceived. Having entered into a binding contract which does not provide for any restitution, the Petitioners cannot seek any relief under equity. It is settled law that there is no equity in contracts, and that the rights and liabilities of the parties are strictly governed by the terms of the contract. Unlike other PPAs, as the Petitioners have itself rightly pointed out, there is no provision for restitution in the present PPA. The phrase the parties must be restored to the same economic position being absent in the present PPA, there can be no question of any relief on a general notion of restitution. The reliance is placed on the Judgment of the Honble Appellate Tribunal dated Petition No. 342/MP/2018 & 343/MP/2018 Page 53 of 75 13.04.2018 in Appeal No. 210 of 2017 in Adani Power Limited v- Central Electricity Regulatory Commission and Ors, wherein it was held that since the Gujarat Bid-01 PPA has no provision for restoration to the same economic position and therefore, the carrying cost will not be applicable. The relevant extract of the Judgment dated 13.04.2018 reads as under: ISSUE NO.3: DENIAL OF CARRYING COST

x. Further, the provisions of Article 13.2 i.e. restoring the Appellant to the same economic position as if Change in Law has not occurred is in consonance with the principle of restitution i.e. restoration of some specific thing to its rightful status. Hence, in view of the provisions of the PPA, the principle of restitution and judgment of the Honble Supreme Court in case of Indian Council for Enviro-Legal Action vs. Union of India & Ors., we are of the considered opinion that the Appellant is eligible for Carrying Cost arising out of approval of the Change in Law events from the effective date of Change in Law till the approval of the said event by appropriate authority. It is also observed that the Gujarat Bid-01 PPA have no provision for restoration to the same economic position as if Change in Law has not occurred. Accordingly, this decision of allowing Carrying Cost will not be applicable to the Gujarat Bid-01 PPA.

111. The Respondent DISCOMS have submitted that with regard to carrying cost, the law stands settled by the Judgment of the Honble Tribunal dated 14.08.2018 in Appeal No. 111 of 2017 in M/s. GMR Warora Energy Limited v- Central Electricity Regulatory Commission and Ors. The Honble Tribunal has decided that if there is a provision in the PPA for restoration of the Seller to the same economic position as if no Change in Law event has occurred, the Seller is eligible for carrying cost for such allowed Change in Law event(s) from the effective date of Change in Law event until the same is allowed by the appropriate authority by an order/ judgment. In Order dated 09.10.2018 in Petition No. 188/MP/2017 and Batch in Acme Bhiwadi Solar Power Private Limited v- Solar Energy Corporation of India and Ors. Batch, the Commission reiterated the aforementioned findings of the Tribunal.

112. The Respondent DISCOMS have submitted that the present PPA is governed by the National Solar Mission Guidelines for selection of 5000 MW Grid Connected Solar PV Power Projects under Phase-II Batch IV issued by Government of India by notification 14.03.2016. This is clear from the stipulation contained in the PPA- Article 1 where the term Guideline has been defined. Article 1 of the PPA dealing with Guidelines dated 14.03.2016 reads as under: Petition No. 342/MP/2018 & 343/MP/2018 Page 54 of 75 ARTICLE 1: DEFINITIONS AND INTERPRETATIONS 1.1 DEFINITIONS Guidelines shall mean the NSM Guidelines for selection of 5000 MW Grid Connected Solar PV Power Projects under Phase-II Batch IV notified vide No. 32/3/2014-15/GSP dated 14 March 2016 including its subsequent amendments and clarifications. National Solar Mission or NSM shall mean the National Solar Mission launched by the Government of India vide resolution No.5/14/2008-{&C dated 11 January 2010, as amended from time to time.

113. The Respondent DISCOMS have submitted that it is settled law that terms cannot be implied into a contract, contrary to the express provisions set out therein. Therefore, when the PPAs clearly do not envisage restitution to the same economic position unlike other PPAs, there can be no question of providing relief under a general notion of business efficacy. In fact, the stark contrast to other PPAs which expressly contemplate economic restitution makes it clear that the same was never intended by the parties while entering into the agreement at the first instance. Thereafter, the Petitioners have made a vague contention regarding entitlement of carrying costs under Section 70 of the Indian Contract Act, 1872 following the principles of quantum meriut. The principle of quantum meriut has no application where the parties are governed by a Contract. Section 70 of the Indian Contract Act, 1872 deals with certain relations resembling those created by contract. The Honble Supreme Court has in its Judgment dated 27.02.2019 in the case of Mahanagar Telephone Nigam Ltd. V. Tata Communications Ltd. upheld this principle and held as under:

2. Having heard the learned counsel for both sides, one neat question arises before this Court, which is, whether, when parties are governed by contract, a claim in quantum meruit under Section 70 of the Indian Contract Act, 1872 [Contract Act] would be permissible. Section 70 of the Contract Act reads as under:

70. Obligation of person enjoying benefit of non gratuitous act.Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered. Petition No. 342/MP/2018 & 343/MP/2018 Page 55 of 75 This Section occurs in Chapter V of the Contract Act, which chapter is headed, of certain relations resembling those created by contract. There are five sections that are contained in this Chapter. Each of them is posited on the fact that there is, in fact, no contractual relationship between the parties claiming under this Chapter. For example, under Section 68, if a person incapable of entering into a contract is supplied necessaries by another person, then the person who has furnished such supplies becomes entitled to be reimbursed from the property of the person so incapable of entering into the contract. Section 69 also deals with a case where a person has no contractual relationship with the other person mentioned therein, but who is interested in the payment of money which the other person is bound by law to pay, and who, therefore, pays it on behalf of such person. Such person is entitled to be reimbursed by the other person. Under Section 71, again, the finder of goods spoken of is a person who is fastened with the responsibility of a bailee as there is no contractual relationship between the finder of goods and the goods which belong to another person. Equally, under Section 72, a person to whom money has been paid or anything delivered by mistake or coercion must repay or return it, or else, such person would be unjustly enriched. Here again, there is no contractual relationship between the parties. It is in this setting that Section 70 occurs.

114. Therefore in view of the above, there can be no question of any relief de hors the provisions of the PPA, under some general principle of quantum meriut. Analysis and decision

115. We have heard the learned counsels for the Petitioners and the Respondents and have carefully perused the records. Since, Petition No. 342/MP/2018 and Petition No. 343/MP/2018 are likely worded and contain similar issues to be adjudicated the same are clubbed together.

116. The brief facts of the case are that the Petitioners, ACME Rewa Solar Energy Private Limited and ACME Jodhpur Solar Energy Private Limited are generating companies and are project companies of M/s ACME Solar Holdings Limited which is engaged in the business of development, building, owning, operating and maintaining utility scale grid connected solar power projects, for generation of solar power. The Respondent No.1, SECI issued a RfS for setting up grid-connected Solar PV Projects in Bhadla Phase III Solar Park, Rajasthan for an aggregate capacity of 500 MW. Pursuant to the aforementioned RfS, the Petitioners (through ACME Solar Holdings Limited) were selected by the SECI as SPDs for the setting up of a solar power project based on photo voltaic technology of 100 MW capacity in the State of Petition No. 342/MP/2018 & 343/MP/2018 Page 56 of 75 Rajasthan. The Petitioners entered into PPAs dated 26.09.2017 with SECI, for the setting up of solar power project of 100 MW capacities in the State of Rajasthan and for the consequent sale of solar power to the SECI. SECI has also entered into back to back PSAs for sale of electricity purchased from the Petitioners to Respondents No. 2 to 4 (Rajasthan Discoms). The Petitioners have engaged one ACME Cleantech Solutions Pvt. Ltd. as its contractor for supply of goods and executed an Agreement for Supply of Goods dated 15.02.2018 which was subsequently amended on 20.02.2018. Vide Notification No. 1/2018 (SG) dated 30.07.2018, the Central Government imposed Safeguard Duty as per the following rates on the import of solar cells and modules:- a. 25% ad valorem, minus anti-dumping duty, if any, when imported during the period from 30 July 2018 to 29 July 2019; b. 20% ad valorem, minus anti-dumping duty, if any, when imported during the period from 30 July 2019 to 29 January 2020; c. 15% ad valorem, minus anti-dumping duty, if any, when imported during the period from 30 January 2020 to 29 July 2020

117. The Petitioners have submitted that issuance of Safeguard Duty Notification have resulted in an increase in recurring and non-recurring expenditure for the Petitioners and have thus adversely impacted the business of the Petitioners. The Petitioners have submitted that imposition of safeguard duty is covered under Article 12 of the PPAs which provide for Change in law and the relief for such Change in Law and the same may be allowed. Further, although there is no concept of return on equity and interest on working capital in a competitively bid tariff, the increase in costs due to change in law events have an indirect bearing on the two. These components are integral to the all-inclusive tariff bid. At the time of the submissions of bid(s), the Petitioner has factored in interest on working capital and return on equity based on the costs prevalent at the time of bid. With the increase in the costs due to the change in law, the working capital requirement, and consequently, the interest on working capital have also increased as compared to requirement and rate prevalent at the time of bid. Thus, the Petitioners are entitled to interest on incremental working capital at normative interest rate to put Petitioners to the same economic position as Petition No. 342/MP/2018 & 343/MP/2018 Page 57 of 75 if change in law has not occurred. The Petitioners have also claimed carrying cost from the date of impact of Change in law till reimbursement by the Respondent.

118. Per Contra, the Respondents have submitted that the SPDs, having participated in the competitive bidding and bid for the project and for generation and sale of electricity, accepting the terms of the bid documents, is bound by the terms thereof and particularly the all-inclusive tariff quoted by the SPDs and incorporated in the PPAs. Being a competitively bid project, there cannot be any additional claim except as allowed under the PPAs, namely the provisions of Change in law under Article 12. The Respondent No.1 has submitted that the jurisdiction of this Commission to decide the matter is not denied or disputed. The Respondent No.1 has submitted that the safeguard duty has been imposed by the Government of India vide Notification No. 01/2018 dated 30.07.2018 issued under the provisions of sub- section (1) of section 8B of the Custom Tariff Act, 1975 on the import of solar cells and modules when the import is from certain specific countries, namely, China PR, Malaysia and from developed countries. The Notification dated 30.07.2018 imposing the safeguard duty is prospective in its operation and has not been given effect to any period prior to 30.07.2018. It is not disputed that the safeguard duty imposed by the Government of India is a Law as defined and covered under the PPAs and dealt with as Change in Law in Article 12 of the PPAs. However, there cannot be any relief to the SPDs due to various reasons: Firstly, the delay in importing the solar cells and modules is attributable to SPDs or its contractors or sub-contractors and meanwhile the imposition safeguard duty levy had come into effect. Secondly, the SPDs did not establish to the satisfaction of the Commission that there has been an actual expenditure and outflow of money on account of payment of safeguard duty to the revenue authorities. Hence, no relief can be granted. Further, the Commission and the Appellate Tribunal have repeatedly upheld that there is no concept of interest on Working Capital and Return on Equity in a competitive bidding process. Also, there is no merit in the principal claim of the Petitioner and therefore the question of payment of Carrying Cost does not arise.

119. The Respondents have also submitted that the Petitioners are not procuring the solar cells from any imported sources, but are procuring from their own group company. The Petitioners have stated in their Petitions that they have engaged one ACME Cleantech Solutions Pvt. Ltd. Petition No. 342/MP/2018 & 343/MP/2018 Page 58 of 75 as its contractor for supply of goods and executed an Agreement for Supply of Goods dated 15.02.2018. Therefore, the Petitioners have no agreement for import of solar cells or even for use of imported solar cells. The imposition of assessment of this tax is therefore not even on the Petitioners, but on the importer of Solar Cells. The increased cost for the Petitioners is only in terms of the commercial agreement entered into by the Petitioners for purchase of the Solar Cells. The difference is between the liability under law and mere commercial arrangement. In the case of the Petitioner, it is the latter and therefore, no claim for change in law is made out before the Commission. The terms of this agreement are subject to negotiation between the parties. It is settled law that an increase in cost by virtue of the terms of a commercial agreement cannot by any stretch of imagination be a change in law. The Petitioners have quoted an all-inclusive tariff which has been incorporated under the PPAs, and further the PPAs having been accepted and signed by the parties is a binding document, and no claim could be made by the Petitioner de-hors the provisions of the PPAs. Article 12 of the PPA deals with the implication of occurrences of any Change in Law event mentioned therein after the effective date (i.e.16.09.2017), to be allowed to the Developer as per the conditions contained in Article 12. Article 12 of the PPAs comes into play only when the additional expenditure is incurred on account of an occurrence of Change in Law event as mentioned therein. Therefore, if the expenditure is incurred for a reason other than occurrence of the Change in Law event, Article 12 does not come into the picture at all, and no relief could be claimed under the same. The Respondent DISCOMS have submitted that there is no concept of interest on working capital and return on equity in a competitive bidding process. Further, there is no dispute on the fact that there can be no payment until the decision of the Appropriate Commission on Change in Law. Therefore, amounts do not become due until the decision of the Appropriate Commission. This being the position there can be no claim for Carrying Cost.

120. From the submissions of the parties, the following issues arise before this Commission: Issue No.1: Whether the imposition of safeguard duty on the import of solar modules can be considered an event covered under Change in Law in terms of the Article 12 of the PPAs? And Whether there is a need to evolve a suitable mechanism to compensate the Petitioners for the increase in recurring and non-recurring expenditure incurred by the Petitioners on account of Change in Law? Petition No. 342/MP/2018 & 343/MP/2018 Page 59 of 75 Issue No. 2: Whether the claim of Petitioners regarding interest on Working Capital, Return of Equity and Carrying Cost for delay in reimbursement by the Respondents is sustainable?

121. No other issue was pressed or claimed.

122. We now discuss the issues one by one: Issue No.1: Whether the imposition of safeguard duty on the import of solar modules can be considered an event covered under Change in Law in terms of the Article 12 of the PPAs? And Whether there is a need to evolve a suitable mechanism to compensate the Petitioners for the increase in recurring and non-recurring expenditure incurred by the Petitioners on account of Change in Law?

123. The Petitioners have submitted that vide Notification No. 1/2018 (SG) dated 30.07.2018, the Central Government imposed Safeguard Duty. The imposition of safeguard duty has resulted in an increase in recurring and non-recurring expenditure for the Petitioners and thus adversely impacted the business of the Petitioners. The imposition of safeguard duty is covered under Article 12 of the PPAs which provides for Change in law and the relief for such Change in Law and requested that the same may be allowed. Further, the Petitioners are entitled to interest on incremental working capital at normative interest rate to put Petitioners to the same economic position as if change in law has not occurred. The Petitioners have also claimed carrying cost from the date of impact of Change in law till reimbursement by the Respondent. Per Contra, the Respondents have submitted that the safeguard duty imposed by the Government of India is a Law as defined and covered under Article 12 of the PPAs. However, there cannot be any relief since the SPDs (and its contractors) failed to import the solar cells and modules as per agreed timelines and further the SPDs also failed to establish to the satisfaction of the Commission that there has been an actual expenditure and outflow of the money on account of payment of safeguard duty to the revenue authorities. Hence, no relief can be granted. Further, the Commission and the Appellate Tribunal have repeatedly upheld that there is no concept of interest on Working Capital and Return on Equity in a competitive bidding process. Also, there is no merit in the principal claim of the Petitioners and therefore the question of payment of Carrying Petition No. 342/MP/2018 & 343/MP/2018 Page 60 of 75 Cost does not arise. The Respondents have submitted that the Petitioners are not procuring the solar cells from any imported sources, but are procuring from their own group company viz. ACME Cleantech Solutions Pvt. Ltd. As such no relief is admissible to the SPDs.

124. The Commission observes that the term Law has been defined in the PPA as:- "Law shall mean in relation to this Agreement, all laws including Electricity Laws in force in India and any statute, ordinance, regulation, notification or code, rule, or any interpretation of any of them by an Indian Governmental Instrumentality and having force of law and shall further include without limitation all applicable rules, regulations, orders, notifications by an Indian Governmental Instrumentality pursuant to or under any of them and shall include without limitation all rules, regulations, decisions and orders of the Appropriate Commission;"

125. The term Indian Government Instrumentality has been defined in the PPA as :- Indian Government Instrumentality shall mean the Government of India, Governments of state(s) of Rajasthan and NCT of Delhi and any ministry, department, board, authority, agency, corporation, commission under the direct or indirect control of Government of India or any of the above state Government(s) or both, any political sub-division of any of them including any court or Appropriate Commission(s) or tribunal or judicial or quasi-judicial body in India; From the above it is apparent that the term Law includes laws, statutes, ordinances, regulations, notifications, codes and rules and all applicable rules, regulations, orders, notifications or interpretation of the aforesaid statutes, ordinances, regulations, notifications, codes, rules by the Government of India or any ministry department, board, authority, agency, corporation and commission under direct or indirect control of the Government of India.

126. Further, as per judgment dated 27.05.2009 the Honble Delhi High Court in the case titled The All India Glass Manufacturers Federation vs. Union of India &Ors. [WP(C) No. 8761 of 2009] has held as under:

12. Under the Act, i.e., Customs Tariff Act, 1975, the Government of India in order to protect the domestic industry has power to impose broadly; Anti-Dumping Duty, Countervailing Duty or the Safeguard Duty. Broadly, Anti-Dumping duty is imposed by the Government of India where goods are imported into the country at a dumped price. Dumped price is a price less than the normal value which is judged with Petition No. 342/MP/2018 & 343/MP/2018 Page 61 of 75 reference to the comparable price of an article imported to the country in the ordinary course of trade when exported from the exporting country. As against this, Countervailing Duty is imposed generally if goods are subsidized in the country of export. Similarly, resort is taken to imposition of safeguard duty if increased quantities of goods enter the country. The determining factor as to which of the three measures ought to be adopted when the goods are imported into country, at a dumped price or are subjected to subsidy in the country of export or in increased quantities, is dependent upon whether these actions result in causing or threaten to cause material injury or material retardation in the establishment of domestic industry or result in causing or threaten to cause serious injury to domestic producers of like or competitive products. In the case of the former, recourse may be had to Anti-Dumping duty or Countervailing Duty, while in case of the latter situation; resort may be had to safeguard duty. 12.1 Under Section 8B of the Act, the Central Government has been given power to impose safeguard duty if after conducting an enquiry it is satisfied that the article imported into the country in such increased quantities and under such conditions, will cause or threaten to cause serious injury to domestic industries. This is a general power available to the Government of India. A specific provision i.e., Section 8C was introduced in the Act by Finance Act, 2003 w.e.f. 11.05.2002 in respect of specific safeguards duty with regard to imports from China. Under Sub- Section (6) of Section 8C, the Central Government has been empowered to make rules for the purposes of giving effect to the provisions of Section 8C. By a notification no. 34/2002-Customs dated 11.06.2002 the Central Government has framed the necessary Rules.

14. A reading of the aforementioned provisions of clause 1(a) and 2 of Article XIX shows that if on account of increased quantities of import of an article into the territory of a contracting party causes or threatens to cause serious injury to the domestic producers in that territory of like or directly competitive products then the contracting party so effected, is free to suspend the obligation in whole or in part or to withdraw or modify the concession in respect of such an article to the extent it is considered necessary to prevent or remedy such injury. Similarly, under clause 2, before taking any action, the contracting party is required to give notice in writing to the other contracting party as far as may be practicable. However, in critical circumstances where delay would cause damage, which would be difficult to repair, action under Paragraph 1 of this Article may be taken provisionally without prior consultation, on the condition that consultation will be effected immediately after taking such action.

127. Further, Section 8B of the Customs Tariff Act, 1975 stipulates as under: 8B. Power of Central Government to impose safeguard duty.-- (1) If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to domestic Petition No. 342/MP/2018 & 343/MP/2018 Page 62 of 75 industry, then, it may, by notification in the Official Gazette, impose a safeguard duty on that article: Provided that no such duty shall be imposed on an article originating from a developing country so long as the share of imports of that article from that country does not exceed three per cent or where the article is originating from more than one developing countries, then, so long as the aggregate of the imports from [developing countries each with less than three per cent import share] taken together does not exceed nine percent of the total imports of that article into India. Provided further that the Central Government may, by notification in the Official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from any country or territory into India, from payment of the whole or part of the safeguard duty leviable thereon. (2) The Central Government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause serious injury to a domestic industry: Provided that where, on final determination, the Central Government is of the opinion that increased imports have not caused or threatened to cause serious injury to a domestic industry, it shall refund the duty so collected: Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed.

128. From the above, the Commission observes that under Section 8B of the Customs Tariff Act, 1975, the Government of India enjoys the general power to impose safeguard duty if it is satisfied that the article imported into the country is in such increased quantities that it will cause or threaten to cause serious injury to domestic industries. Further, in critical circumstances, the Government of India is empowered to impose safeguard duty provisionally without prior consultation. However, it is pertinent to mention here that The Directorate General of Trade Remedies vide final findings F.No.22/1/2018-DGTR, dated the July, 2018, published in the Gazette of India, Extraordinary, Part I, Section 1, on 16 July, 2018, has recommended the imposition of safeguard duty on subject goods after considering submissions of 205 interested stakeholders including M/s ACME Solar Holdings Limited (mentioned at Sr. No. 93 at page no.5 of the said report). Hence, the notification dated 30.07.2018 is a conscious view of the Government of India after taking into consideration various suggestions and request of the stakeholders.

129. The Commission observes that vide Notification No. 01/2018-Customs (SG)New Delhi, the 30.07.2018G.S.R.(E), The Government of India, Ministry of Finance (Department of Revenue) has imposed Safeguard Duty as under: Petition No. 342/MP/2018 & 343/MP/2018 Page 63 of 75 Whereas, in the matter of import of "Solar Cells whether or not assembled in modules or panels (hereinafter referred to as the subject goods), falling under heading 8541or tariff item 8541 40 11of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), the Directorate General of Trade Remedies vide final findings F.No.22/1/2018-DGTR, dated the July, 2018, published in the Gazette of India, Extraordinary, Part I, Section 1, on July, 2018, has recommended the imposition of safeguard duty on subject goods falling under heading 8541or tariff item 8541 40 11of the First Schedule to the Customs Tariff Actor a period of two years at the rate specified here in below. Now, Therefore, in exercise of the powers conferred by sub-section (1) of Section 8B of the Customs Tariff Act, read with rules 12, 14 and 17of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997,after considering the said findings of the Directorate General of Trade Remedies and subject to the provisions of paragraph 2, hereby imposes on subject goods falling under heading 8541or tariff item 8541 40 11of the First Schedule to the Customs Tariff Act, when imported into India, a safeguard duty at the following rate, namely:- (a)twenty five per cent.ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30 July, 2018 to 29 July, 2019 (both days inclusive); (b)twenty per cent.ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30 July, 2019 to 29 January, 2020(both days inclusive);and (c) Fifteen per cent.ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30 January, 2020to 29 July, 2020(both days inclusive).

2. Nothing contained in this notification shall apply to imports of subject goods from countries notified as developing countries vide notification No. 19/2016-Customs (N.T.) dated 5 February, 2016, except China PR, and Malaysia.

130. The Commission further observes that Article 12 of the PPAs provides for Change in Law and the relief for such change in law in the following terms:-

12. ARTICLE 12: CHANGE IN LAW In this Article 12, the following terms shall have the following meanings: 12.1.1 "Change in Law" means the occurrence of any of the following events after the Effective Date resulting into any additional recurring/ non-recurring expenditure by the SPD or any income to the SPD: the enactment, coming into effect, adoption, promulgation, amendment, modification or repeal (without re-enactment or consolidation) in India, of any Law, including rules and regulations framed pursuant to such Law; change in the interpretation or application of any Law by any Indian Governmental Instrumentality having the legal power to interpret or apply such Law, or any Competent Court of Law; Petition No. 342/MP/2018 & 343/MP/2018 Page 64 of 75 the imposition of a requirement for obtaining any Consents, Clearances and Permits which was not required earlier; a change in the terms and conditions prescribed for obtaining any Consents, Clearances and Permits or the inclusion of any new terms or conditions for obtaining such Consents, Clearances and Permits; except due to any default of the Seller; Any statutory change in tax structure or introduction of any new tax made applicable for setting up of Solar Power Project and supply of power from the Project by the SPD shall be treated as per the terms of this Agreement. For the purpose of considering the effect of this change in Tax structure due to change in law after the date of submission of Bid, the date such law comes into existence shall be considered as effective date for the same; but shall not include (i) any change in any withholding tax on income or dividends distributed to the shareholders of the Seller, or (ii) any change on account of regulatory measures by the Appropriate Commission 12.2 Relief for Change in Law 12.2.1 The aggrieved Party shall be required to approach the Central Commission for seeking approval of Change in Law. 12.2.2 The decision of the Central Commission to acknowledge a Change in Law and the date from which it will become effective, provide relief for the same, shall be final and governing on both the Parties.

131. The Respondents have raised the issue of applicability of Article 12 of PPA in case of import of solar cells and argued that this levy is neither as regards setting up of solar power projects nor is for supply of power. They have argued that safeguard duty is not covered under the sixth bullet of Article 12.1.1 of the PPAs dealing with change in law. They have submitted that there being specific provision as regards taxes (i.e. bullet sixth), other bullets are not applicable.

132. The Commission observes that the Appellate Tribunal for Electricity by the Judgment dated 14.08.2018 in Appeal No. 111 of 2017 in M/s. GMR Warora Energy Limited v. Central Electricity Regulatory Commission and Ors. has decided on interpretation of Change in Law provision similar to the present PPAs. It was held as under: This Tribunal has decided that any tax or application of new tax on supply of power also covers the taxes on inputs required for such generation and supply of power to the Distribution Licensees. Petition No. 342/MP/2018 & 343/MP/2018 Page 65 of 75

133. From the above, it is apparent that any tax or application of new tax on supply of power covers the taxes on inputs required for such generation and supply of power to the Distribution Licensees. In the instant case, Safeguard Duty has been levied on import of Solar Cells whether or not assembled in modules or panels. The change in duties/ tax imposed by the Central Government has resulted in the change in cost of the inputs required for generation.

134. Accordingly, the Commission of the view that as per the Government of India Notification No. 01/2018-Customs (SG) dated 30.07.2018 and provision of PPAs related to change in law the imposition of the Safeguard Duty is covered under Change in Law under first, second and sixth bullet of Article 12 of the PPAs.

135. The Commission observes that the Notification No. 01/2018-Customs (SG) New Delhi dated 30.07.2018 stipulates that a safeguard duty at twenty five per cent to fifteen per cent ad valorem minus anti-dumping duty payable has been levied on Solar Cells whether or not assembled in modules or panels when imported into India during the period from 30th July, 2018 to 29 July, 2020 (both days inclusive). The Commission observes that since the duration of the safeguard duty levied is two years, hence as per requirement of the Customs Tariff Act, 1975 the duty is progressively liberalized at regular intervals during the period of its imposition. The notification provides for a diminishing Safeguard Duty slab in the range of 25% to 15% applicable ad valorem on the imports from 30.07.2018 till 29.07.2020. The impact of Safeguard Duty notification is on/any portion of import whose point of taxation is on or after implementation of the Notification dated 30.07.2018 the same will be subjected to purview of Safeguard Duty.

136. The Commission is of the view that Safeguard Duty became effective from 30.07.2018 and hence the date of notification becomes the cut-off date for imposing the same. Meaning thereby, the notification/imposition of Safeguard Duty will directly affect the projects where Solar Cells whether or not assembled in modules or panels were imported on or after 30.07.2018 where:-

a) the bids have been accepted and crystalized before 30.07.2018 or the Power Purchase Agreements have been executed before 30.07.2018 and the Scheduled Date of Petition No. 342/MP/2018 & 343/MP/2018 Page 66 of 75 Commissioning of the project is after 30.07.2018; OR

b) the bids have been accepted and crystalized before 30.07.2018 or the Power Purchase Agreements have been executed before 30.07.2018 and the Scheduled Date of Commissioning of the project is before 30.07.2018 but the same stands extended after the cut-off date i.e. 30.07.2018 due to the circumstances permitted under provisions of the executed PPAs;

137. It is pertinent to mention here that the Petitioners have submitted that they have entered into Agreements dated 15.02.2018 and 20.02.2018 with one M/s ACME Cleantech Solutions Pvt. Ltd. as its contractor for design, engineering, manufacture/ procurement and supply of solar photovoltaic modules, inverters, power and distribution transformers, junction boxes and all other items essential for solar power plant. The Respondents have submitted that the imposition of the Safeguard duty is on the importer viz. M/s ACME Cleantech Solutions Pvt. Ltd. since as per schedule the equipment was to be ordered not later than 01.05.2018, and delivered not later than 09.06.2018 i.e. before imposition of Safeguard Duty. Further, Article 11.2 provides that any increase in taxes/duties on account of the delay attributable to the supplier shall be to the account of the supplier. However, the Petitioners are seeking to pass on the said cost on the procurers and the consumers at large. This is only to benefit itself and its own sister concern and the same may not be allowed.

138. The Respondents have further submitted that the Supplementary Agreement was handed over for the first time only on 07.02.2019 at the time of hearing. Further, a perusal of the Supplementary Agreement dated 20.02.2018 shows that the same has been incorporated with a non-judicial stamp paper of Rs.50 which were purchased on 29.06.2017. In contrast, the Supply Contract for supply dated 15.02.2018 and the PPA dated 26.09.2017 is on an e- stamp paper of Rs. 100 each. There is no reason given in this regard by the Petitioner for using a non-judicial stamp paper of Rs.50 instead of an e-stamp paper as has been used for the original agreement.

139. The Commission observes that the fate of the case of the Petitioners depends upon the veracity of execution of the Supplementary Agreement dated 20.02.2018. The execution of the Supplementary Agreement has been challenged by the Respondents on following basis: Petition No. 342/MP/2018 & 343/MP/2018 Page 67 of 75 firstly, conduct of the Petitioners viz. disclosure of the execution of the Supplementary Agreement to the Commission after completion of pleadings and at the time of final arguments on 07.02.2018 and Secondly, the Supplementary Agreement is a created document.

140. The Commission observes that as per Judgment dated 11.08.2016 of Honble Delhi High Court in case titled Shri Ramanand vs. Delhi Development Authority (Thru Its Vice Chairman) & Anr. it was held that:

8. Similarly in Haldiram (India) Pvt. Ltd. & Ors. vs. M/s. Haldiram Bhujiawala & Anr. (supra) this court in para 21 and 22 held as follows:-

21. In any event, both under the old Order 7 Rule 18 sub-rule (1) and new Order 7 Rule 14 sub-rule (3) CPC a new document can certainly be produced on behalf of plaintiff at the final hearing of suit, but the same has to be done with leave of the Court. It is not that the plaintiff has a legal vested right to file a document at a belated stage i.e. at the final hearing of the suit. The said provision gives a discretionary power to the Court, which needless to say has to be exercised in a reasonable and legal manner. In fact, this power has to be exercised sparingly and for some overpowering reason and not as a matter of routine. If petitioners interpretation of Sub Rule 3 is accepted, it would make it impossible for the trial court to conclude the hearing of any suit.

9. The legal position is clear that only those documents can be permitted to be filed after the initial stage where the Court grants leave.

141. Regarding the first objection about disclosure of the execution of the Supplementary Agreement to the Commission after completion of pleadings and at the time of final arguments on 07.02.2018, the Commission is of the view that the Supplementary Agreement dated 20.02.2018 is necessary for the ends of the justice. And, therefore, we permit it to be placed and made a part of the records.

142. Regarding, veracity of Supplementary Agreement the Commission observes that the impugned Supplementary Agreement has been executed on 20.02.2018 on a Non-Judicial Stamp Paper of Rs.50 alongwith the five revenue stamps of Rs. 10 each pasted on the front. Hence, the Supplementary Agreement was executed on Non-Judicial Stamp Paper of Rs.

100 instead of Rs. 50 as alleged by the Respondents. The Commission further observes that Non-Judicial Stamp Paper was purchased for the execution of Supplementary Agreement Petition No. 342/MP/2018 & 343/MP/2018 Page 68 of 75 on 29.06.2017 and was used for executing Supplementary Agreement on 20.02.2018 i.e. after a gap of about eight months. The Commission observes that Honble Supreme Court of India in its Judgment dated 19-02-2008 in the case of Thiruvengada Pillai vs. Navaneethammal and Anr., has held that: the stamp papers do not have any expiry period. Relevant extract from SC judgement is reproduced herein below: The Indian Stamp Act, 1899, nowhere prescribes any expiry date for use of a stamp paper. Section 54 merely provides that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered. The stipulation of the period of six months prescribed in Section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.

143. In view of the above the Commission is of the view that there is no illegality in purchasing the Non-Judicial Stamp Paper and using the same for execution of Supplementary Agreement after a gap of about eight months. It is not the case of the Respondents that the documents are forged and therefore we do not want to go into the issue further.

144. In view of the above discussion, the protection under clause of Change in Law as contained in Article 12 of the PPAs is available to the Petitioners.

145. Now we deal with the issue of the need to evolve a suitable mechanism for compensation. As per discussion above, the Commission has already held that the imposition of the Safeguard Duty is an event covered as Change in law as contained under Article 12 of the PPAs. The immediate question before the Commission is what should be the basis of the calculation of the compensation? The Commission observes that as per the Notification No. 01/2018-Customs (SG) New Delhi dated 30.07.2018, safeguard duty is payable on Solar Cells whether or not assembled in modules or panels. The Petitioners have claimed increase of the project cost due to increase in cost of modules in the range of 7.12~9.58%. However, the Commission observes that in the instant petitions, the tariff has been discovered under transparent e-bidding process in accordance with the NSM guidelines issued by the Central Petition No. 342/MP/2018 & 343/MP/2018 Page 69 of 75 Government. In the Competitive Bidding Scenario, the SPDs bid levellised tariff without disclosing the details of the calculations of the project cost including capital expenditure. The design of the bid levellised tariff is solely a decision of the SPDs. Therefore, the Commission cannot rely on the figures provided by the Petitioners in the Petitions. As such the actual amount of the Safeguard Duty imposed by the competent authority and paid by the Petitioners needs to be compensated.

146. Accordingly, the Commission directs the Petitioners to make available to the Respondent No. 1 all relevant documents exhibiting clear and one to one correlation between the projects and the supply of imported goods, duly supported by relevant invoices and Auditors Certificate. The Respondent No. 1 is further directed to reconcile the claims for Change in Law on receipt of the relevant documents and pay the amount so claimed to the SPDs. Further, the Respondent No. 1 shall claim the amount from the other Respondents. The Commission is of the view that the compensation on account of imposition of Safeguard Duty w.e.f. 30.07.2018 should be discharged by the Petitioners and the Respondents as one- time payment in a time bound manner within sixty days from the date of issue of this Order or from the date of submission of claims by the Petitioners, whichever is later, failing which it shall attract late payment surcharge in terms of the PPAs. Alternatively, the parties may mutually agree to a mechanism for the payment of such compensation on annuity basis spread over such period not exceeding the duration of the PPAs as a percentage of the tariff agreed in the PPAs. This will obviate the hardship of the Respondents for one-time payment.

147. The issue is decided accordingly. Issue No. 2: Whether the claim of Petitioners regarding interest on Working Capital, Return of Equity and Carrying Cost for delay in reimbursement by the Respondents is sustainable?

148. The Petitioners have submitted that although there is no concept of Return on Equity and Interest on Working Capital in a competitively bid tariff, the increase in costs due to change in law events have an indirect bearing on the two. These components are integral to the all-inclusive tariff bid. At the time of the submissions of bid(s), the Petitioners have factored in interest on working capital and return on equity based on the costs prevalent at Petition No. 342/MP/2018 & 343/MP/2018 Page 70 of 75 the time of bid. With the increase in the costs due to the change in law events explained above, the working capital requirement, and consequently, the interest on working capital have also increased as compared to requirement and rate prevalent at the time of bid. Thus, the Petitioners are entitled to interest on incremental working capital at normative interest rate to put Petitioners to the same economic position as if change in law has not occurred.

149. The Petitioners have further submitted that Change in Law is based upon the principle of restitution and equity and the purpose of such a clause is to enable a party to seek contractual remedies for incremental cost that have arisen which was beyond its control post the effective date. Accordingly, while the phrase the parties must be restored to the same economic position may not be present in the PPA, the same must be read in, having regard to the purpose of the change in law clauses. Further, Para 5.7.1 of the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects issued by Ministry of Power vide Notification bearing no.: No. 23/27/2017-R&R., dated 03.08.2017 stipulates that if any Change In Law event results in any adverse financial loss/ gain to the Solar Power Generator, the Solar Power Generator/ Procurer shall be entitled to compensation by the other party, in order to ensure that the Solar Power Generator is placed in the same financial position as it would have been, had it not been for the occurrence of the Change in Law event. Thus, the Tariff Guidelines as issued under the provisions of Section 63 clearly recognize that the SPDs are required to be placed in the same financial position as it would have been, had the Change in Law not occurred, which is essentially the principle of restitution. Thus, it is imperative that the Petitioner is granted an interest on working capital at normative interest rate in order to put Petitioner to the same economic position as if change in law has not occurred.

150. The Petitioners have submitted that the principle of Carrying Costs has already been allowed by the Tribunal in various judgments including A. No. 210 of 2017, A. No. 193 of 2017 and A. No. 111 of 2017 as also allowed by the Commission in its Order 235/MP/2015 dated 17.09.2018 pursuant to remand.

151. Per Contra, the Respondents have submitted that there cannot be any consideration for individual tariff elements such as interest on working capital or return on equity or any other in a competitive bid process under Section 63 of the Electricity Act, 2003 and there cannot Petition No. 342/MP/2018 & 343/MP/2018 Page 71 of 75 be any computation of the same. There is no concept of interest on working capital or other individual tariff elements including return on equity in competitively bid process and bidders are required to give the bid based on all-inclusive tariff. There cannot be any issue of return on equity on incremental working capital and margin. These aspects are no longer a res-integra and has been decided in judgment dated 19.04.2017 in Appeal No. 161 of 2015 - Sasan Power Limited v- CERC; Order dated 14.08.2018 in Appeal No. 111 of 2017 -GMR Warora -v- CERC and Ors.; judgment dated 21.12.2018 passed by Honble Appellate Tribunal of Electricity in Appeal No. 193 of 2018- GMR Kamalanga Energy Limited and Anr. v- CERC and Ors. Order dated 05.02.2019 passed by the Commission in Petition No.187/MP/2018 and Batch in the matter of M/s. Renew Wind Energy (TN2) Private Limited v- NTPC Limited.

152. The Respondents have further submitted that there is no provision in the PPA regarding carrying cost or interest for the period till the decision of the Commission. The Change in Law claim of the Petitioners is yet to be adjudicated and the amount if any, due have to be determined/computed. Thereafter, only the Petitioners required to raise a Supplementary invoice for the amount so computed. It is only in case of default on the part of the Respondent SECI in not making the payment by the due date as per supplementary invoices, does the issue of Late Payment Surcharge arise i.e. for the period after the due date. The Respondents have placed reliance on the decision of the Honble Appellate Tribunal in SLS Power Limited -v- APERC and Others (Appeal No. 150 of 2011) and Batch. The Respondents have further submitted that the PPAs do not have a provision dealing with restitution principles of restoration to same economic position. Therefore, the Petitioner is not entitled to claim relief which is not provided for in the PPAs. The Respondents have placed reliance on the Judgment of the Honble Appellate Tribunal dated 13.04.2018 in Appeal No. 210 of 2017 in Adani Power Limited v- CERC and Ors., wherein it was held that since the Gujarat Bid-01 PPA has no provision for restoration to the same economic position, therefore, the carrying cost will not be applicable. The Respondents have also placed reliance on the judgment of the Honble Tribunal dated 14.08.2018 in Appeal No.

111 of 2017 in M/s. GMR Warora Energy Limited v- CERC and Ors. wherein it has been decided that if there is a provision in the PPA for restoration of the Seller to the same economic position as if no Change in Law event has occurred, the Seller is eligible for Petition No. 342/MP/2018 & 343/MP/2018 Page 72 of 75 carrying cost for such allowed Change in Law event(s) from the effective date of Change in Law event until the same is allowed by the appropriate authority by an order/ judgment. In the present Petitions also, there is no provision in the PPAs for carrying cost or restitution and therefore the same, will not be applicable in the case of the Petitioner.

153. The Respondents have further submitted that it is a settled law that terms cannot be implied into a contract, contrary to the express terms of the PPA. Thus, if the PPAs already contemplates for the provision of Late Payment Surcharge for the delay in payment of the bill, supplementary or otherwise (as stated above), then by no stretch can it be said that the intent of the PPAs was to restore/restitute the parties to the same economic position in case of such contingency. In matters of contract, relief cannot be granted on principles of equity. The business efficacy rule can be considered as a part of interpretative rule only where the provision is vague and cannot be relied upon to create a substantive right in favour of the Petitioners. Quantum Meruit has application when the contract is held to be invalid.

154. The Commission observes that in the judgment of the Appellate Tribunal for Electricity dated 13.04.2018 in Appeal No. 210 of 2017 in Adani Power Limited v. Central Electricity Regulatory Commission and Ors., it was held that since Gujarat Bid-01 PPA has no provision for restoration to the same economic position, the decision of allowing carrying cost will not be applicable. The relevant extract of the Judgment dated 13.04.2018 reads as under: ISSUE NO.3: DENIAL OF CARRYING COST

x. Further, the provisions of Article 13.2 i.e. restoring the Appellant to the same economic position as if Change in Law has not occurred is in consonance with the principle of restitution i.e. restoration of some specific thing to its rightful status. Hence, in view of the provisions of the PPA, the principle of restitution and judgement of the Hon'ble Supreme Court in case of Indian Council for Enviro-Legal Action vs. Union of India &Ors., we are of the considered opinion that the Appellant is eligible for Carrying Cost arising out of approval of the Change in Law events from the effective date of Change in Law till the approval of the said event by appropriate authority. It is also observed that the Gujarat Bid-01 PPA have no provision for restoration to the same economic position as if Change in Law has not occurred. Accordingly, this decision of allowing Carrying Cost will not be applicable to the Gujarat Bid-01 PPA. Petition No. 342/MP/2018 & 343/MP/2018 Page 73 of 75

155. The Commission further observes that in the Judgment of the Appellate Tribunal dated 14.08.2018 in Appeal No. 111 of 2017 in M/s. GMR Warora Energy Limited v. Central Electricity Regulatory Commission and Ors.it was held that if there is a provision in the PPA for restoration of the Seller to the same economic position as if no Change in Law event has occurred. Therefore, the Seller is eligible for carrying cost for such allowed Change in Law event(s) from the effective date of Change in Law event until the same is allowed by the appropriate authority by an order/ judgement. In the present case, there is no provision in the PPAs either for carrying cost or restitution. The relevant extract from the decision in GMR Warora case on the aspect of carrying cost reads as under:

ix. In the present case we observe that from the effective date of Change in Law the Appellant is subjected to incur additional expenses in the form of arranging for working capital to cater the requirement of impact of Change in Law event in addition to the expenses made due to Change in Law. As per the provisions of the PPA the Appellant is required to make application before the Central Commission for approval of the Change in Law and its consequences. There is always time lag between the happening of Change in Law event till its approval by the Central Commission and this time lag may be substantial. As pointed out by the Central Commission that the Appellant is only eligible for surcharge if the payment is not made in time by the Respondents Nos. 2 to 4 after raising of the supplementary bill arising out of approved Change in Law event and in PPA there is no compensation mechanism for payment of interest or carrying cost for the period from when Change in Law becomes operational till the date of its approval by the Central Commission. We also observe that this Tribunal in SLS case after considering time value of the money has held that in case of redetermination of tariff the interest by a way of compensation is payable for the period for which tariff is re-determined till the date of such re-determination of the tariff. In the present case after perusal of the PPAs we find that the impact of Change in Law event is to be passed on to the Respondents Nos. 2 to 4 by way of tariff adjustment payment as per Article 13.4 of the PPA. The relevant extract is reproduced below: 13.4 Tariff Adjustment Payment on account of Change in Law 13.4.1 Subject to Article 13.2 the adjustment in Monthly Tariff Payment shall be effective from: the date of adoption, promulgation, amendment, re-enactment or repeal of the Law or Change in Law; or the date of order/ judgment of the Competent Court or tribunal or Indian Government instrumentality, it the Change in Law is on account of a change in interpretation of Law. (c) the date of impact resulting from the occurrence of Article 13.1.1. From the above it can be seen that the impact of Change in Law is to be done in the Petition No. 342/MP/2018 & 343/MP/2018 Page 74 of 75 form of adjustment to the tariff. To our mind such adjustment in the tariff is nothing less then re-determination of the existing tariff.

x. Further, the provisions of Article 13.2 i.e. restoring the Appellant to the same economic position as if Change in Law has not occurred is in consonance with the principle of 'restitution' i.e. restoration of some specific thing to its rightful status. Hence, in view of the provisions of the PPA, the principle of restitution and judgment of the Hon'ble Supreme Court in case of Indian Council for Enviro Legal Action vs. Union of India &Ors., we are of the considered opinion that the Appellant is eligible for Carrying Cost arising out of approval of the Change in Law events from the effective date of Change in Law till the approval of the said event by appropriate authority. This Tribunal vide above judgement has decided that if there is a provision in the PPA for restoration of the Seller to the same economic position as if no Change in Law event has occurred, the Seller is eligible for carrying cost for such allowed Change in Law event (s) from the effective date of Change in Law event until the same is allowed by the appropriate authority by an order/ judgment.

156. The Commission observes that since the PPAs do not have a provision dealing with restitution principles of restoration to same economic position therefore, the claim regarding separate Interest on Working Capital/Carrying Cost is not admissible.

157. Our decisions in this Order are summed up as under: a. Issue No. 1: The imposition of the Safeguard Duty vide Notification No. 1/2018 (SG) dated 30.07.2018 is squarely covered as the event classified as Change in Law under first, second and sixth bullet of Article 12 of the PPAs. The Commission directs the Petitioners to make available to the Respondent No.1 all relevant documents exhibiting clear and one to one correlation between the projects and the supply of imported goods, duly supported by relevant invoices and Auditors Certificate. The Claim based on discussions in paragraph 146 above of this Order shall be paid within sixty days of the date of this Order or from the date of submission of claims by the Petitioners whichever is later failing which it will attract late payment surcharge as provided under PPAs. To ensure time bound compliance within sixty days of the Order, it is directed that the Respondent No.1 shall reconcile the claim related documents within 15 days of submission of claim by Petitioners. Alternatively, the Petitioners and the Respondent No.

1 may mutually agree to a mechanism for the payment of such compensation on annuity Petition No. 342/MP/2018 & 343/MP/2018 Page 75 of 75 basis spread over the period not exceeding the duration of the PPAs as a percentage of the tariff agreed in the PPAs. b. Issue No. 2: The claim regarding separate Interest on Working Capital/Carrying Cost is not admissible.

158. Accordingly, the Petition No. 342/MP/2018 and Petition No. 343/MP/2018 are disposed of. Sd/- Sd/- Sd/-