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KARNATAKA POWER TRAN... v. KARNATAKA ELECTRICI...
Summarized Legal Opinion: Appellate Tribunal for Electricity — Judgment dated 14.10.2022
Factual and Procedural Background
The present document summarizes two sets of connected proceedings that arose from OP No.20/2019 before the Karnataka Electricity Regulatory Commission ("KERC" or "the State Commission"). Solitaire Powertech Private Limited ("Solitaire") filed OP No.20/2019 seeking compensation from Karnataka Power Transmission Corporation Limited ("KPTCL") for loss of generation attributable to non-completion of evacuation facilities. By order dated 14.09.2021, the State Commission partly allowed the petition, holding that Solitaire was entitled to compensation at the agreed tariff of Rs.4.43 per unit for generation losses from 01.08.2020 until the transmission congestion/constraint subsisted, and directing Solitaire to submit calculations for verification and determination by the Commission. The Commission ordered that the amount found due be paid in lump sum by KPTCL within specified timelines and provided for interest in case of default. Subsequent to that order Solitaire submitted an affidavit dated 06.11.2021 containing calculations of monthly generation losses from August 2020 to September 2021 and sought verification and payment.
While the Commission was to verify calculations and determine the payable amount, the Commission recorded interim directions on 21.06.2022 directing release of 50% of pending dues by KPTCL and later reiterated timelines. KPTCL challenged (or sought extension/recall of) those interim directions, moved applications for time to comply and for recall of the interim orders. On 14.09.2022 the Commission recalled its earlier interim orders of 21.06.2022 and 20.07.2022, reasoning that no enforceable liability existed until the Commission determined the quantum after considering rival claims, and characterising its earlier order as a preliminary decree requiring further enquiry.
KPTCL filed the first captioned appeal before this Tribunal challenging the original decision dated 14.09.2021. Solitaire has also filed an appeal (appeal no.338/2021) challenging the date from which compensation should be paid. The Tribunal heard the parties on the issues arising from the Commission's orders.
Legal Issues Presented
- Whether Solitaire was entitled to compensation/damages for generation loss at the agreed tariff of Rs.4.43 per unit for the period beginning 01.08.2020 as directed by the State Commission in its order dated 14.09.2021.
- Whether the State Commission could direct interim payment (50% of claimed dues) prior to completing verification and final determination of the quantum of compensation.
- Whether the Commission was justified in recalling its interim orders of 21.06.2022 and 20.07.2022 which directed payment or extension for payment, on the ground that there was no enforceable liability until the Commission determined the amount after hearing rival claims.
- What is the correct procedural course for the State Commission to follow to verify Solitaire's calculations, determine the amount due, and make the order enforceable — including appropriate timelines for completion of those steps.
- From which date Solitaire is entitled to receive compensation (noted as also being the subject matter of a separate pending appeal, appeal no.338/2021).
Arguments of the Parties
Solitaire (Petitioner / Appellant in second captioned appeal)
- Solitaire submitted an affidavit dated 06.11.2021 with monthly calculations of generation losses from August 2020 to September 2021 and sought verification and directions for payment in accordance with the Commission's order dated 14.09.2021.
- At the Commission hearing on 21.06.2022, Solitaire's counsel argued there was no bar to releasing payments despite the appeal pending before APTEL and requested release of at least 75% of the dues (the Commission directed 50% instead).
- Solitaire contended (as recorded) that the objections raised by KPTCL were vague, and asserted that the amount claimed, though large, merited release of payments; however the Commission noted that no enforceable debt exists until the quantum is finally determined.
KPTCL (1st Respondent / Appellant in first captioned appeal)
- KPTCL's counsel pointed out that an appeal had been filed before this Tribunal challenging the Commission's order dated 14.09.2021, and argued that in view of the pending appeal and need to verify the petitioner's calculation methodology, payments could not be released immediately.
- KPTCL moved applications seeking extension of time to make payments directed on 21.06.2022 and later sought recall of the interim payment orders (IA No.3/2022), arguing that there was no enforceable liability until the Commission determined the amount payable after adjudicating rival claims.
Karnataka Electricity Regulatory Commission (as recorded in its orders)
- The Commission initially directed partial interim payments (50% of pending dues) on 21.06.2022 while retaining the balance subject to the outcome of the pending appeal before APTEL.
- On reconsideration (order dated 14.09.2022) the Commission held that its earlier interim directions ought to be recalled because the final quantum had not been determined and there was no enforceable debt until such determination; it characterised the 14.09.2021 order as a preliminary decree directing further material and enquiry to ascertain the quantum of generation loss.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Tribunal analysed the chronology and the legal posture of the matter as follows:
- The Tribunal noted that the Commission's order of 14.09.2021 granted Solitaire a preliminary entitlement to compensation at the specified rate and required further steps — submission of calculations and verification — before the quantum could be finally determined. The Tribunal described that order as being "in the nature of a preliminary decree" directing further material to ascertain quantum.
- The Tribunal observed that, to date, the Commission had not undertaken the verification of the calculations submitted by Solitaire nor completed the adjudication to determine the exact amount payable, even though Solitaire had filed the calculations (affidavit dated 06.11.2021).
- Given the lack of final adjudication on the quantum, the Tribunal accepted that the Commission was within its rights to recall its own interim orders of 21.06.2022 and 20.07.2022 (which had directed payment of 50% of claimed dues), because there was no enforceable liability until the Commission determined the compensation after considering rival claims. The Tribunal reproduced and relied on the Commission's reasoning that a direction for payment in the face of a disputed claim and without adjudication would be inappropriate.
- At the same time, the Tribunal criticised the Commission for failing to carry its own 14.09.2021 order to a logical and final conclusion in a timely manner. The Tribunal emphasised that the Commission functions in a quasi-judicial capacity akin to a civil court in such proceedings and could not execute an order (i.e., enforce payment) before passing a final determination on the amount payable. The Tribunal found the delay — exceeding a year without conclusion — to be unfair to the claimant if the claimant is rightfully entitled to relief.
- In light of these considerations and having heard the parties' counsels, the Tribunal permitted the parties to withdraw the present appeals while reserving the contentions raised by both sides to be pressed in future, if necessary. The Tribunal directed the State Commission to proceed expeditiously to verify the calculations already submitted by Solitaire, to hear the parties, and to return clear findings as to the amount to be paid by KPTCL, including clear timelines so that the order becomes enforceable (subject to available remedies). The Tribunal recommended priority handling and asked the Commission to complete the process preferably within two months and to avoid unnecessary adjournments.
Holding and Implications
Holding: The appeals and applications were disposed of as withdrawn.
Immediate direct consequences and directions:
- The Tribunal disposed of the appeals as withdrawn while expressly reserving the contentions of both sides on objections to the Commission's order dated 14.09.2021 for future pressing, if necessary.
- The Tribunal directed the State Commission to verify Solitaire's calculations (already submitted), to hear the parties, and to return clear findings as to the amount payable by KPTCL to Solitaire, giving clear directions and timelines for such determination so that the order becomes enforceable. The Tribunal asked the Commission to proceed on priority and preferably complete the process within two months, and not to permit unnecessary adjournments.
- The Tribunal noted that appeal no.338/2021 (filed by Solitaire and concerning the date from which compensation should be paid) remains pending and may affect the determination of the date from which Solitaire is entitled to compensation.
Broader implications:
The opinion does not announce or rely upon any new judicial precedents. Its effect is procedural and interlocutory: it validates the Commission's power to recall interim payment directions in the absence of a final determination of liability while also requiring the Commission to complete the mandated verification and determination within an expedited timeframe so that any entitlement can be enforced. The decision leaves substantive contentions reserved for future adjudication.
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
IA NOS.964 & 53 OF 2022 IN
DFR NO. 11 OF 2022 &
IA NOS.1702, 1419, 54, 1054, 55, 1156, 1368, 1369, 1370 & 183 OF 2022
AND
APPEAL NO.390 OF 2022 & IA NO.1547 Of 2022 Dated: 14.10.2022 Present: Hon'ble Mr. Justice R.K. Gauba, Officiating Chairperson Hon'ble Mr. Sandesh Kumar Sharma, Technical Member
DFR NO. 11 OF 2022
In the matter of:
KARNATAKA POWER TRANSMISSION
CORPORATION LIMITED
A Company registered under the provisions of The Companies Act 1956 and having Registered office at
Kaveri Bhawan, Bangalore -560009 Represented herein by its
Financial Advisor (Regulatory Affairs) … Appellant(s)
VERSUS
1. KARNATAKA ELECTRICITY REGULATORY
COMMISSION
Rep. by its Secretary, No.16, C-1, Miler Tank Bed Area, Vasanth Nagar, Bengaluru - 560052
2. SOLITAIRE POWERTECH PRIVATE LIMITED
A Company registered under the provisions of The Companies Act 1956 and having Registered office at
616A, 16A, Sixth Floor,
Devika Tower, Nehru Place,
New Delhi - 110019
Rep. by its Director
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3. SOLAR ENERGY CORPORATION
OF INDIA LIMITED
Rep. by its Managing Director, 1stFloor, D-3, A-Wing, District Centre, Religaire Building,
Saket, New Delhi - 110017 … Respondent(s) Counsel for the Appellant (s) : Mr. C.S. Vaidyanathan, Sr. Adv. Mr. S.Sriranga, Sr. Adv.
Mr. Sumana Naganand
Ms. Samiksha Jain
Counsel for the Respondent (s) : Mr. Parag P. Tripathi, Sr. Adv. Mr. Hemant Sahai
Ms. Molshree
Mr. Nishant Talwar for R-2
APPEAL NO.390 OF 2022
In the matter of:
M/S SOLITAIRE POWERTECH PRIVATE LIMITED
Rep. by Director A616A, 16A, Sixth Floor, Devika Tower, Nehru Place, New Delhi - 110019 … Appellant(s)
VERSUS
1. KARNATAKA ELECTRICITY REGULATORY
COMMISSION
Rep. by The Secretary, No.16, C-1, Milers Tank Bed Area, Vasanth Nagar, Bengaluru-560052.
2. KARNATAKA POWER TRANSMISSION
CORPORATION LIMITED
Rep. by its Chairperson 2ndFloor, KPTCL, Kaveri Bhavan, Bengaluru - 560009
3. SOLAR ENERGY CORPORATION
OF INDIA LIMITED
Rep. by Chairman 1stFloor, D-3, A-Wing, District Centre, Religaire Building,
Saket, New Delhi - 110017
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New Address:
SOLAR ENERGY CORPORATION
OF INDIA LIMITED
Rep. by Chairman 06thFloor, Plate B, NBCC Office, Block Tower-2, East Kidwai Nagar, New Delhi 110 023 … Respondent(s) Counsel for the Appellant (s) : Mr. Parag P. Tripathi, Sr. Adv. Mr. Hemant Sahai
Ms. Molshree
Mr. Nishant Talwar
Counsel for the Respondent (s) : Mr. C.S. Vaidyanathan, Sr. Adv. Mr. S.Sriranga, Sr. Adv.
Mr. Sumana Naganand
Ms. Samiksha Jain for R-2
J U D G M E N T (Oral) PER HON'BLE MR. JUSTICE R.K. GAUBA, OFFICIATING CHAIRPERSON
1. Both the captioned appeals arise out of same proceedings before the respondent Karnataka Electricity Regulatory Commission (for short "KERC", or "the State Commission"), the starting point of the controversy being filing of OP no.20/2019 by Solitaire Power Tech Private Limited (hereinafter referred to as "Solitaire"), appellant in the second captioned appeal, the prime relief thereby sought against Karnataka Power Transmission Corporation Limited ("KPTCL"), the appellant in first captioned appeal, being compensation for non-completion of evacuation facilities in time. The State Commission, by its order dated 14.09.2021, upheld the grievances of Solitaire as to its claim for compensation and directed as under:
"The petition is partly allowed holding that:
(i) the petitioner is entitled to compensation/damages at the rate of agreed tariff of Rs.4.43 per unit for the generation loss to the extent for which the generation from the Power Project of the petitioner could not be evacuated between 01.08.2020 till the transmission congestion/constraint subsists;
(ii) the petitioner shall submit to the Commission, the calculation showing compensation/damages becoming due based on the monthly
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generation losses from 01.08.2020 to the date of this Order within eight weeks from the date of this order, marking a copy of the same to the 1st respondent (KPTCL);
(iii) the amount so claimed in sub-para (ii) of this Order would be verified and determined by the Commission after hearing the 1st respondent (KPTCL) and the petitioner, and the amount so determined and found due shall be paid in lump-sum by the 1st respondent (KPTCL) to the petitioner within 8 (eight) weeks from the date of order verifying and determining the calculations submitted by the petitioner. In default of payment of compensation by the 1st respondent (KPTCL), it shall pay interest at 6% per annum on the said amount so found due from the date of default till the date of payment;
(iv) the petitioner shall submit its claims for compensation/ damages at the rate of agreed tariff of Rs.4.43 per unit for the generation loss to the extent for which the generation from the Power Project of the petitioner could not be evacuated between the date of this Order and the dates up to which the transmission congestion/constraint subsists on monthly basis to the 1st respondent (KPTCL), and the compensation/damages so claimed shall be paid within one week from the date of receipt of such monthly claims, in default the 1st respondent (KPTCL) shall pay interest at 6% per annum on the monthly amount claimed from the date of default till the date of payment; and
(v) except to the extent stated above, the petitioner is not entitled to any other reliefs as prayed for in the petition."
2. We are informed that pursuant to directions as aforesaid in the order dated 14.09.2021, Solitaire submitted, particularly with reference to sub-para
(ii) of the operative part (supra), an affidavit sworn on 06.11.2021 for presenting calculation of monthly generation losses from August 2020 till September 2021, the transmission congestion / constraints having, however, continued (till date), the calculation thus being for a limited period, the request being for verification and appropriate directions for payment.
3. It appears that in the proceedings that were taken out in the wake of order dated 14.09.2021, the Commission heard the parties on 22.03.2022 when it was pointed out on behalf of KPTCL that appeal (the first captioned matter) had been filed before this tribunal challenging order dated 14.09.2021 passed in OP no.20/2019. The matter was thereafter again heard on 21.06.2022 when the Commission recorded the following daily order:
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"Case is called for hearing on 21.06.2022. Counsel for petitioner Sri. Hemanth Sahai for HAS Advocates present and prays for release of pending payments. Counsel for Respondent Smt. Sumana Naganand for Just Law present, submits that in view of pending Appeal before the Hon'ble APTEL as also to verify the methodology of calculations arrived at by the petitioner and hence no payment could be paid. Petitioner counsel submitted that there is no bar in releasing payments though Appeal is filed in APTEL and prays for release of at least 75% of the dues. Commission heard both counsels and directed Respondent counsel to release 50% of pending dues within four weeks' time, balance is subject to outcome of the pending Appeal before the Hon'ble APTEL and to file compliance affidavit on or before 20.07.2022. Further directed both counsels to file memo of calculation. Call on 20.07.2022."
4. The above order was followed by yet another order of similar nature recorded on 20.07.2022:
"Case is called for hearing on 20.07.2022. Counsel for Petitioner Sri. Hemanth Sahai for HAS Advocates present, submits that the respondent has failed to comply the orders of the Commission dated 21.06.2022 for release of 50% of dues and prays for directions for immediate payment, Senior Counsel Sri S. Sriranga for Just Law appeared for Respondent, ,prays another four weeks' time for compliance for which counsel for petitioner objected. Commission directed the Senior Counsel for Respondent to release 50% of the dues (Rs.6.25.55.734/-) before 23.08.2022 and to file compliance affidavit, call on 23.08.2022."
5. It is pointed out that during the proceedings in above nature before the Commission, KPTCL moved an application on 15.07.2022 seeking period of four weeks from 20.07.2022 "to make payment as directed in the order dated 21.06.2022".
6. The KPTCL, however, subsequently moved an application (IA no.3/2022) on 23.08.2022 praying to the Commission for recall of orders dated 21.06.2022 and 20.07.2022. The said application resulted in order dated 14.09.2022, the observations and directions recorded by the Commission being as under:
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"2. We have heard the learned counsel for the parties. On consideration of the material on record and submissions made, the Commission is of the considered view that the order dated 21.06.2022 and 20.07.2022, are to be recalled for the following reasons:
a) It is not disputed by the learned counsel for the petitioner that there is no enforceable dues or debt, until the Commission determines the compensation/damages after considering the rival claims of the parties.
b) It is contended by the learned counsel for the petitioner that the 1st respondent KPTCL, has not filed any statement of calculation to estimate the generation loss as against the statement of calculation filed by the petitioner and that the objection filed by the 1st respondent KPTCL is vague and requires to be rejected and that the amount claimed by petitioner being a huge amount, the impugned order dated 21.06.2022 is justified and valid. That contention of the petitioner cannot be accepted unless there is an enforceable liability against the 1st respondent. A claim by a party, though appears to be prima facie acceptable, there cannot be a direction against the rival party for payment of whole or any portion of such claim if disputed, without there being an adjudication of the same.
c) The final order dated 14.09.2021 passed in OP No 20/2019, is in the nature of a preliminary decree directing the parties to produce further material to ascertain the quantum of generation loss for certain period. The compensation/damages payable is to be determined by the Commission on consideration of the material placed by the parties. The present case is at the stage of enquiry of the rival claims of the parties.
3. For the above reasons the order dated 21.06.2022 directing the respondent to pay 50% of the claim made by the petitioner and the order dated 20.07.2022 extending time for payment, are hereby recalled."
7. The first captioned appeal of KPTCL challenges the original decision dated 14.09.2021 whereby the Commission had upheld the claim of Solitaire for compensation on above-mentioned grounds, determining the rate at which the damages are to be paid and the period from which such right would
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inure (i.e. 01.08.2020). The said very order is also under challenge by appeal no.338/2021, filed by Solitaire, claiming right to compensation from an earlier date (the date of commissioning of the project). The pleadings in appeal no.338/2021 have since been completed and the said matter is now in the List of Finals expected to come up for hearing in due course in its turn.
8. We have heard learned counsel on both sides. We are of the view that the proceedings before the State Commission in the matter of determination of the compensation on the basis of principles decided by order dated 14.09.2021 of the Commission are yet inchoate. There is no exercise undertaken till date by the State Commission for verification of the calculation submitted by Solitaire for compensation to be directed to be paid nor any determination made as was assured by the order dated 14.09.2021. In these circumstances, the directions for certain payments to be made may have been premature, more in the nature of enforcement of the order even before it was finally passed. The Commission, in these circumstances, appears to have been within its rights and jurisdiction to recall the said order. At the same time, we must also observe that the Commission has failed to properly carry the responsibility arising particularly out of its own order dated 14.09.2021 to a logical end. The Commission sits in the proceedings from which the present matter arises as a substitute for the civil court. It could not have proceeded to execute the order without passing the final order of determination of the amount payable by the KPTCL. Because of the misdirected approach more than a year has elapsed without any relief coming the way of the claimant, this being unfair if it is rightfully entitled thereto.
9. At this stage, the learned senior counsel for each of the appellants before us, having taken instructions, submit that they may be permitted to withdraw the present appeals reserving their respective contentions agitated
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here to be pressed for decision if the need survives in future, though agreeing that the Commission must proceed to determine the amount payable in terms of the order dated 14.09.2021 expeditiously so that the proceedings before the Commission stand concluded at an early date.
10. We dispose of the appeals as withdrawn. We reserve the contentions of both sides on the objections that are taken by KPTCL to the order dated 14.09.2021 to be pressed in due course in future proceedings. Subject to the decision on appeal no.338/2021, which continues to remain pending on the board of this tribunal, it having a bearing on the issue as to from which date Solitaire is entitled to received compensation, we direct the State Commission to verify the calculation already submitted by Solitaire after hearing the parties, and return clear findings as to the amount that is to be directed to be paid by KPTCL unto Solitaire, giving clear directions as to the timelines for such purposes so that the order becomes enforceable subject, of course, to such remedies as may be available to both the parties under the law. Given the time which has been frittered away on account of misdirected approach adopted by it thus far, we would expect the Commission to take up the matter on priority and pass the necessary orders in above light expeditiously at an early date preferably within two months. Needless to add, the Commission will not indulge the parties in any unnecessary adjournments.
11. The appeals and applications filed therewith are disposed of in above terms.
Pronounced in open court on this 14th Day of October, 2022 (Sandesh Kumar Sharma) (Justice R.K. Gauba)
Technical Member Officiating Chairperson pr/tp
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