# 14 S.C.R.115 GUJARAT URJA VII<AS NIGAM LIMITED v. SOLAR SEMICONDUCTOR POWER COMPANY (INDIA) PRIVATE LIMITED AND OTHERS

- **Citation:** [2017] 14 S.C.R. 115
- **Court:** Supreme Court of India
- **Decided:** 2017-10-25
- **Case number:** Civil Appeal No. 6399 of2016
- **Bench:** Kurian Joseph, R. Banumathi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/14-s-c-r-115-gujarat-urja-vii-as-nigam-limited-v-solar-semiconductor-power-31954
- **Pages:** 48

## Headnote

. Gujarat Electricity Regulatory Commission (Conduct of
Business) Regulations, 2004:
A
B
c
Regulations 80 to 82 .. - Whether the State Electricity
Regulatory Commission, in exercise of its inherent powers, could
have extended the control period for the respondent Company -
Held: The Commission does not have the power to extend the control
period in exercise of its inherent powers provided under Reg. 80 to
82, to the advantage of one party and to disadvantage of the other -
D
Electricity Act, 2003 - s. 181.
Allowing the appeal, the Court
HELD:
Per Kurian Joseph, J.:
1. An amendment to tariff by the Regulatory Commission
is permitted under Section 62(4) read with Section 64(6) of the
Electricity Act, 2003. Section 86(l)(a) clothes the Commission
with the power to determine the tariff and under Section 86(1)(b),
it is for the Commission to regulate the price at which electricity
is to be procured from the generating companies. Section 86 (l)(e)
deals with. promoting co-generation and generation of electricity
from renewable sources of energy. Therefore, there cannot be
any quarrel with regard to the power conferred on the Commission
with regard to fixation of tariff for the electricity procured from
E
F
the generating companies or amendment thereof in the given G
circumstances. [Para 29] [145-C-D]
2. Part X of the Act from Sections 76 to 109 deals with
"Regulatory Commissions" providing for th.eir constitution,
powers and functions. Section 92 read with Section 94 provides
for the proceedings and power of the Commission while exercising H
115
116
SUPREME COURT REPORTS
[2017) 14 S.C.R.
A its functions and powers. Under Section 92, the proceedings of
the Commission are to be governed by what is specified in the
appropriate Regulation with regard to the transaction of business
at its meetings. It is that Regulation which is referred to under
Section 181 (zl) "rules of procedure for transaction of business
B under sub-section (1) of Section .92". Under Section 181(zp) other
matters also can be specified. Section 2(62) defines "specified"
as "specified by regulations made by the Appropriate Commission
or the Authority, as the case may be, under this Act". [Para 30)
1145-·E-F)
3. Section 94 provides that the Appropriate Commission
C shall be vested with certain powers as are vested in a civil court,
only in six specified areas. Under Section 94(1)(g), the
Commission has the powers of a civil court in respect of "any
other matter which may be prescribed". Under Section 2(52)
"prescribed means prescribed by rules made by the Appropriate
D Government under this Act". [Para 31) [145-G-H)
4. Regulations 80 to 82 of Gujarat Electricity Regulatory
Commission (Conduct of Business) Regulations, 2004 are
instances of such powers specified by the Commission.
Regulation 80 has provided for the inherent power of the
E Commission to the extent of making such orders as may be
necessary for the ends of justice or to prevent the abuse of the
process of the Commission. Such inherent powers are to be
exercised notwithstanding only the restrictions on the
Commission under the Conduct of Business Regulations, meaning
thereby that there cannot be any restrictions in the Conduct of
F Business Regulations on exercise of inherent powers by the
Commission. But the specified inherent powers are not as
pervasive a power as available to a court under Section 151 of
the Code of Civil Procedure, 1908. [Para 32) [146-A-C)
5. However, the Commission is enjoined with powers to
G issue appropriate orders in the interest of justice and for
preventing abuse of process of the Commission, to the extent
not otherwise provided for under the Act or Rules. In other words,
the inherent power of the Commission is available to it for
exercise only in those areas where the Act or Rules are silent.
H [Para 32) [146-D-E)
_ GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
117
SEMICONDUCTOR POWER CO. (I) PVT. LTD.
6. Under Regulation 81, the Commission is competent to A
adopt a procedure which

## Text

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[2017) 14 S.C.R.115
GUJARAT URJA VII<AS NIGAM LIMITED
v.
SOLAR SEMICONDUCTOR POWER COMPANY (INDIA)
PRIVATE LIMITED AND OTHERS
(Civil Appeal No. 6399 of2016)
OCTOBER 25, 2017
[KURIAN JOSEPH AND R. BANUMATHI, JJ.)
. Gujarat Electricity Regulatory Commission (Conduct of
Business) Regulations, 2004:
A
B
c
Regulations 80 to 82 .. - Whether the State Electricity
Regulatory Commission, in exercise of its inherent powers, could
have extended the control period for the respondent Company -
Held: The Commission does not have the power to extend the control
period in exercise of its inherent powers provided under Reg. 80 to
82, to the advantage of one party and to disadvantage of the other -
D
Electricity Act, 2003 - s. 181.
Allowing the appeal, the Court
HELD:
Per Kurian Joseph, J.:
1. An amendment to tariff by the Regulatory Commission
is permitted under Section 62(4) read with Section 64(6) of the
Electricity Act, 2003. Section 86(l)(a) clothes the Commission
with the power to determine the tariff and under Section 86(1)(b),
it is for the Commission to regulate the price at which electricity
is to be procured from the generating companies. Section 86 (l)(e)
deals with. promoting co-generation and generation of electricity
from renewable sources of energy. Therefore, there cannot be
any quarrel with regard to the power conferred on the Commission
with regard to fixation of tariff for the electricity procured from
E
F
the generating companies or amendment thereof in the given G
circumstances. [Para 29] [145-C-D]
2. Part X of the Act from Sections 76 to 109 deals with
"Regulatory Commissions" providing for th.eir constitution,
powers and functions. Section 92 read with Section 94 provides
for the proceedings and power of the Commission while exercising H
115
116
SUPREME COURT REPORTS
[2017) 14 S.C.R.
A its functions and powers. Under Section 92, the proceedings of
the Commission are to be governed by what is specified in the
appropriate Regulation with regard to the transaction of business
at its meetings. It is that Regulation which is referred to under
Section 181 (zl) "rules of procedure for transaction of business
B under sub-section (1) of Section .92". Under Section 181(zp) other
matters also can be specified. Section 2(62) defines "specified"
as "specified by regulations made by the Appropriate Commission
or the Authority, as the case may be, under this Act". [Para 30)
1145-·E-F)
3. Section 94 provides that the Appropriate Commission
C shall be vested with certain powers as are vested in a civil court,
only in six specified areas. Under Section 94(1)(g), the
Commission has the powers of a civil court in respect of "any
other matter which may be prescribed". Under Section 2(52)
"prescribed means prescribed by rules made by the Appropriate
D Government under this Act". [Para 31) [145-G-H)
4. Regulations 80 to 82 of Gujarat Electricity Regulatory
Commission (Conduct of Business) Regulations, 2004 are
instances of such powers specified by the Commission.
Regulation 80 has provided for the inherent power of the
E Commission to the extent of making such orders as may be
necessary for the ends of justice or to prevent the abuse of the
process of the Commission. Such inherent powers are to be
exercised notwithstanding only the restrictions on the
Commission under the Conduct of Business Regulations, meaning
thereby that there cannot be any restrictions in the Conduct of
F Business Regulations on exercise of inherent powers by the
Commission. But the specified inherent powers are not as
pervasive a power as available to a court under Section 151 of
the Code of Civil Procedure, 1908. [Para 32) [146-A-C)
5. However, the Commission is enjoined with powers to
G issue appropriate orders in the interest of justice and for
preventing abuse of process of the Commission, to the extent
not otherwise provided for under the Act or Rules. In other words,
the inherent power of the Commission is available to it for
exercise only in those areas where the Act or Rules are silent.
H [Para 32) [146-D-E)
_ GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
117
SEMICONDUCTOR POWER CO. (I) PVT. LTD.
6. Under Regulation 81, the Commission is competent to A
adopt a procedure which is at variance with any of the other
provisions of the Regulations in case the Commission is of the
__ view that such an exercise is warranted in view of the special
circumstances and such special circumstances are to be recorded
in writing. However, it is specifically provided under Section 181
B
that there cannot be a Regulation which is not in conformity with
the provisions of the Act or Rules~ [Para 33) [146-E-F)
7. Under Regulation 82, the Commission has powers to
deal with any matter or exercise any power under the Act for
which no Regulations are framed meaning thereby where
something is expressly provided in the Act, the Commission has
C
to deal with it only in accordance with the manner prescribed in
the Act. The only leeway available to the Commission is only
when the Regulations on proceedings are silent on a specific issue.
There cannot be any exercise of the inherent power for dealing
with any matter which is otherwise specifically provided under D
the Act. The exercise of power which .has the effect of amending
the PPA by varying the tariff can only be done as per statutory
provisions and not under the inherent power referred to in
Regulations 80 to 82. [Para 34] (146-G-H; 147-A-B)
8. This Court should be specially careful in dealing with -E
matters of exercise of inherent powers when the interest of
consumers is at stake. The interest of consumers, as an objective,
can be clearly ascertained from the Act. The Preamble of the Act
mentions "protecting interest of consumers" and Section 6l(d)
requires that the interests of the consumers are to be safeguarded
when the Appropriate Commission specifies the terms and
F
conditions for determination of tariff. Under Section 64 read with
Section 62, determination of tariff is to be made only after
considering all suggestions and objections received from the
public. Hence, the generic tariff once determined under the statute _
with notice to the public can be amended only by following theG
same procedure. Therefore, the approach of this Court ought to
be cautious and guarded when the decision has its bearing on the
consumers. [Para 35) [147-C-D]
9. Regulation 85 provides for extension of time. The same
is available only in two specified situations - (i) for extension of H
118
SUPREME COURT REPORTS
[2017] 14 S.C.R.
A time prescribed by the Regulations and (ii) extension of time
prescribed by the Commission in its order for doing any act. The
control period is not something prescribed by the Commission
under the Conduct of Business Regulations. The control period
is also not an order by the Commission for doing any act.
B Commissioning of a project is the act to be performed in terms of
the obligation under the PPA and that is between the producer
and the purchaser, viz., respondent No.1 and appellant. Hence,
the Commission cannot extend the time stipulated under the PPA
for doing any act contemplated under the agreement in exercise
of its powers under Regulation 85. Therefore, there cannot be
C extension of. the control period under the inherent powers of the
Commission. [Para 36) (147-E-G)
10. The Commission being a creature of statute cannot
assume to itself any powers which are not otherwise conferred
on it. Under the guise of exercising its inherent power, the
D Commission cannot take recourse to exercise of a power,
procedure for which is otherwise specifically provided under the
Act. [Para 37) (147-G-H; 148-A)
11. However, Respondent No. 1 can take recourse to the
liberty available to them for re-determining of tariff if otherwise
E permissible under law and in which case it will be open to the
parties to take all available contentions before the Commission.
[Para 38) [148-B-C]
Gujarat Urja Vikas Nigam Limited v. EMCO Limited
and Anr. (2016) 11 SCC 182 : [2016) 1 SCR 857;
F
Gujarat Urja Vikas Nigam Limited v. Tarini
Infrastructure Limited and Ors. (2016) 8 SCC 743
: (2016) 5 SCR 990 - relied on.
·
Per R. Banumathi,.J. (Concurring)
1. It is not. correct that the question of law on the
G Commission's inherent jurisdiction to extend the control period
has been settled inter-se the parties in the earlier round of
litigation. [Para 13) [154-B-C)
H
2. Under Regulations 80 to 82, the inherent powers of the
State Commission are saved. Under Regulation 80, which is akin
. GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
119
SEMICONDUCTOR POWER CO. (I) PVT. LTD.
to Section 151 CPC, the power of the State Commission is only A
intended to regulate the conduct of the Commission, that is, to
regulate its own procedure. That power cannot travel beyond its
own procedure so as to alter the terms and conditions of the PPA
entered into between the parties to grant substantive relief to
. the first respondent by extending the control period of Tariff Order
(2010). beyond 28.0t.2012. [Para 141 [154-C-DJ
B
3. The inherent power is not a provision of law to grant
any substantive relief. But it is only a procedural provision to
make orders to secure the ends of justice and to prevent abuse
of process of the Court. It cannot be used to create or recognize
C
· substantive rights of the parties. [Para 16] [154-G]
4. In the present case, rights and obligations of the parties
flow from the terms and conditions of the Power Purchase
Agreement (PPA). PPA is a contract entered between the
appellant and the first respondent with clear understanding of
the terms of the contract. A contract, being a creation of both the D
parties, is to be interpreted by having due regard to the actual
· terms settled between the parties. The PPA is a complex fiscal
decision consciously taken by the parties. In the contract
involving rights Qf the appellant and ultimately the rights of the
consumers to whom the electricity is supplied, Commission E
cannot invoke its inherent jurisdiction to substantially alter the
terms of the contract between the parties so as to prejudice the
interest of the appellant and ultimately the consumers. [Para 17]
(156-D-F]
5. It may be that the tariff rate as per Tariff Order (2010)
as determined by the Committee has been incorporated in clause
5.2 of the PPA. But that does not in any manner confer power
upon the State Commission to exercise its inherent jurisdiction
F
to extend the control period to the advantage of the project
proponent-first respondent and to the disadvantage of the
appellant who are governed by the terms and conditions of the G
contract. It is not within the powers of the Commission to exercise
its inherent jurisdiction to extend the control period to the
advantage of any party and to the disadvantage of the other would
amount to varying the terms of the contract b.etween the parties.
(Para 18] 156-G-H; 157-A]
H
120
SUPREME COURT REPORTS
[2017] 14 S.C.R.
A
6. The State Commission has determined tariff for solar
power producers vide order dated 29.01.2010 and tariff for next
control period vide order dated 27.0l.20I2. The order dated
29.01.2010 is applicable for projects commissioned from
29.01.2010 to 28.0l.20I2 and the order dated 27.0l.20I2 is
applicable for projects commissioned from 29.0l.20I2 to
B 31.03.2015. The tariff is determined by the State Commission
under Section 62. The choice of entering into contract/PPA based
on such tariff is with the Power Producer and the Distribution
Licensee. The State Commission in exercise of its power under
Section 62 of the Act, may conceivably re-determine the tariff, it
C cannot force either the generating company or the licensee to
enter into a contract based on such tariff nor can it vary the terms
of the contract invoking inherent jurisdiction.[Para 21J[I58-A-C]
7. In exercise of its statutory power, under Section 62 of
the Electricity Act, the Commission has fixed the tariff rate. The
D word 'tariff' has not been defined in the Act. Tariff means a
schedule of standard/prices or charges provided to the category
or categories for procurement by licensee from generating
company, wholesale or bulk or retail/various categories of
consumers. After taking into consideration the factors in Section
E 6I(I)(a) to (i), the State Commission determined the tariff rate
for various categories including Solar Power PV project and the
same is applied uniformly throughout the State. When the said
tariffrate as determined by the Tariff Order (2010) is incorporated
in the PPA between the parties, it is a matter of contract between
the parties. Respondent No.I is bound by the terms and conditions
F of PPA entered into between respondent No.I and the appellant
by mutual consent and that the State Commission was not right
in exercising its inherent jurisdiction by extending the first
control period beyond its due date and thereby substituting its
view in the PPA, which is essentially a matter of contract between
the parties. [Para 25) [I60-D-F]
G
8. Under Section 94(I)(t), the Commission has the power
to review its own decision. The power of review under Section
94(I)(t) is akin to that under Order XLVII Rule 1 CPC. At the
instance. of affected parties or the generating companies or the
Commission on its own motion may review its own decision only
H if such order was made under: (i) mistake or error of fact apparent
GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
121
- SEMICONDUCTOR POWER CO. (I) PVT. LTD.
on the face of the record; (ii) discovery of new and important A
matter which was not within the applicant's knowledge at the time
when the order was made; or (iii) any other sufficient reason to
meet the ends of justice. [Para 26] [160-G-H; 161-A]
9. Contention of the appellant is that grounds were made
out by the first respondent for review of first Tariff Order which
B
was applicable till 28.01.2012 is also left open. [Para 26) [161-B]
10. Liberty is granted to the appellant to urge the
contentions on merits, before the Commission and the
Commission to consider the same on its own merits. [Para 27)
[162-B-C]
C
11. Thus. when the 1st respondent commissioned its project -
beyond 13.03.2012, Commission cannot exercise its inherent
jurisdiction and vary the terms to extend the control period of
Tariff Order dated 29.01.2010 in so far as the 1st respondent of
the contract-Power Purchase Agreement (PPA) between the D
appellant and the first respondent. The earlier order passed by
this Court in first round of litigation. has not conclusively decided
the substantial question of law inter-se the parties"that is exercise
of inherent jurisdiction by the Commission to vary the terms of
PPA by extending the control period beyond the stipulated time.
[Para 28) [162-C-E)
E
Vinod Seth v. Devinder Bajaj and Anr. (2010) 8 SCC
1 : [2010) 7 SCR 424; Ram Prakash Agarwal and Am:
v. Gopi Krishan (dead through LRs.) and Ors. (2013)
11 SCC 296 : [2013] 6 SCR 127; Gujarat Urja Vikas
Nigam Limited v. EMCO Limited and Am: (2016) 11 SCC
F -
182 : [2016] 1 SCR 857; Gujarat Urja Vikas Nigam
Limited v. Tarini Infrastructure Limited and Ors. (2016)
8 sec 743 : [2016] 5 SCR 990 - relied on.
S. Nagaraj and Ors. v. State of Karnataka and Am:
(1993) 4 Suppl. sec 595 : [1993] 2 Suppl. SCR 1 -
G
referred to.
Case Law Reference
In the Judgment of Kurian Joseph, J:
[2016] 1 SCR 857
relied on
[2016) S SCR 990
relied on
Para 25
Para 26
H
. 122
SUPREME COURT REPORTS
· [2017] 14 S.C.R.
A In the Jud2ment of R. Banumathi, J:
[2010) 7 SCR 424
relied on
Para 16
[2013) 6 SCR 127
relied on
Para 16
· [2016) 1 SCR 857
relied on
Para23
B
(2016) 5 SCR 990
referred to
Para24
[1993) 2 Suppl. SCR 1
referred to
Para26
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6399
of2016.
C
From the Judgment and Order dated 11.05.2016 of the Appellate
Tribunal for Electricity, New Delhi in Appeal No. 170of2014.
V. Giri, Sr. Adv., Anand Ganesan, Ms. Ranjeeta Ramachandran
(for Ms. Hemantika Wahi), Advs. for the Appellant.
Jayant Bhushan, Sr. Adv., Suyodhan Byrapaneni, Mohd. Wasay
D Khan, Ms. Filza Moonis, G. Ramakrishna Prasad, Advs. for the
Respondents.
The Judgments of the Court were delivered by
KURIAN, J. I. The principal question which arises in this case
E is whether the Gujarat Electricity Regulatory Commission (the
Commission), in exercise of its inherent powers, could have extended
the control period for the I" respondent Company (Respondent no. I).
The control period is the period during which a particular tariff order
operates.
F
2. In order to address the issue, certain provisions of the Electricity
Act, 2003 (hereinafter referred to as "the Act") are required to be
noticed. Part VII of the Act deals with tariff. Sections 61, 62 and 64 of
the Act are of particular relevance. :-
G
H
"61. Tariff regulations.-The Appropriate Commission shall,
subject to the provisions of this Act, specify the terms and
conditions for the determination of tariff, and in doing so, shall be
guided by the following, namely:-
(a) the principles and methodologies specified by the Central
Commission for determination of the tariff applicable to
generating companies and transmission licensees;
GUJARAT URJA VIK.AS NIGAM LTD. v. SOLAR
123
SEMICONDUCTOR POWER CO. (I) PVT. LTD. [KURIAN, J.]
(b) the generation, transmission, distribution and su1mly of A
electricitr are conducted on commercial Qrinci11les;
(c) the factors which would encourage competition, efficiency,
economical use of the resources, good perform~nce and
optimum investments;
(d) safegyarding of consumers' interest and at the same time, .. B
recovei:y of the cost of electricity in a reasonable manner;
(e) the principles rewarding efficiency in performance;
(f) multi-year tariff principles;
(g) that the tariffprogressively reflects the cost of supply of c
electricity and also reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h) the Qromotion of co-generation and generation of electricij:y
from renewable .sources of energy;
(i)
the National Electricity Policy and tariff policy:
D
Provided that the terms and conditions for determination of
tariff under the Electricity (Supply) Act, 1948 ( 54 ofl 948),
the Electricity Regulatory Commissions Act, 1998 (14 of
1998) and the enactments specified in the Schedule as they
E
stood immediately before the appointed date, shall continue
to apply for a period of one year cir until the terms and
conditions for tariff are specified under this section,
whichever is earlier.
62. Determination of tanff.-(1) The Appropriate Commission·
shall determine the tariff in accordance with the provisions of F
this Act for -
(a) supply of dectricij:y by a generating company to a'c!istribution
licensee:
Provided that the Appropriate Commission may, in case of G
shortage of supply of electricity, fix the minimum and
maximum ceiling of tariff for sale or purchase of electricity
in pursuance of an agreement, entered into between a
generating company and a licensee or between licensees,
for a period not exceeding one year to ensure reasonable
prices of electricity;
H
124
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
(b) transmission of electricity;
( c) wheeling of electricity;
( d) retail sale of electricity:
[2017) 14 S.C.R.
Provided that in case of distribution of electricity in the same
area by two or more distribution licensees, the Appropriate
Commission may, for promoting competition among distribution
licensees, fix only maximum ceiling of tariff for retail sale of
electricity.
(2) The Appropriate Commission may require a licensee or a
generating company to furnish separate details, as may be
specified in respect of generation, transmission and distribution
for determination of tariff.
(3) The Appropriate Commission shall not, while determining
the tariff under this Act, show undue preference to any consumer
of electricity but may differentiate according to the consumer's
load factor, power factor, voltage, total consumption of electricity
during any specified period or the time at which the supply is
required or the geographical position of any area, the nature of
supply and the purpose for which the supply is required.
( 4) No tariff or part of any tariff may ordinarily be amended,
more frequently than once in any financial year, except in respect
of any changes expressly permitted under the terms of any fuel
surcharge formula as may be specified.
(5) The Commission may require a licensee or a generating
company to comply with such procedure as may be specified
for calculating the expected revenues from the tariff and charges
which he or it is permitted to recover.
( 6) If any licensee or a generating company recovers a price or
charge exceeding the tariff determined under this section, the
excess amount shall be recoverable by the person who has paid
such price or charge along with interest equivalent to the bank
rate without prejudice to any other liability incurred by the
licensee.
xxx
xxx
xxx
GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
125
SEMICONDUCTORPOWER CO. (I) PVT. LTD. [KURIAN, J.].
64. Procedure for tariff order.-(1) An application for A
determination of tariff under section 62 shall be made by a
generating company or licensee in such manner and accompanied
by such fee. as may be determined by regulations.
(2) Every applicant shall publish the application, in such
abridged form and manner, as may be specified by the Appropriate
B
Commission.
(3) The Appropriate Commission shall, within one hundred
and twenty days from receipt of an application under sub-section
( 1) and after considering all suggestions and objections received
from the public,-
( a) issue a tariff order accepting the application with such
modifications or such conditions as may be specified in that
order;
(b) reject the application for reasons to be recorded in writing
c
if such application is not in accordance with the provisions :D
of this Act and the rules and regulations made thereunder
or the provisions of any other law for the time being in
force:
Provided that an applicant shall be given a reasonable opportunity
of being heard before rejecting his application.
E
( 4) The Appropriate Commission shall, within seven days of
making the order, send a copy of the o'rder to the Appropriate
Government, the Authority, and the concerned licensees and to
the person concerned.
(5) Notwithstanding anything contained in Part X, the tariff for
any inter-State supply, transmission or wheeling of electricity, as
F
the case may be, involving the territories of two States may,
upon application made to it by the parties intending to undertake
such supply, transmission or wheeling, be determined under this
section by the State Commission havingjurisdiction in respect of · ·
the licensee who intends to distribute electricity and make
G
payment therefor.
( 6) A tariff order shall, unless amended or revoked, continue to
be in force for such period as may be specified in the tariff
order."
(Emphasis supplied) H
126
SUPREME COURT REPORTS
[2017] 14 S.C.R.
A
3. A State Commission is constituted under Section 82 of the Act.
The Section to the extent relevant reads as follows:
"82. Constitution of State Commission.-( 1) Every State
Government shall, within six months from the appointed date, by
notification, constitute for the purposes of this Act, a Commission
B
for the State to be known as the (name of the State) Electricity
Regulatory Commission:"
c
D
E
F
G
'H
4. Section 86 of the Act provides for the functions of the State
Commission. To the extent relevant, the Section reads as follows:
"86. Functions of State Commission.-( 1) The State
Commission shall discharge the following functions, namely:-
(a) determine the tariff for generation, SUQQly, transmission and
wheeling of electricity, wholesale, bulk or retail, as the case
may be, within the State:
Provided that where open access has been permitted to a
category of consumers under section 42, the State
Commission shall determine only the wheeling charges and
surcharge thereon, if any, for the said category of consumers;
(b) regylate electrici!Y Qurchase and Qrocurement Qrocess of
distribution licensees including the Qrice at which electrici!Y
shall be Qrocured from the generating comQanies or
licensees or from other sources throus!h agreements for
Qurchase ofQower for distribution·and SUQI!lx within the
State;
(c) facilitate intra-State transmission and wheeling of electricity;
(d) issue licences to persons seeking to act as transmission
. licensees, distribution licensees and electricity traders with
respect to their operations within the State;
(e) Qromote cogeneration and generation of electricitx from
renewable sources of energx bx Qroviding suitable measures
for connectivi!Y with the grid and sale of electrici!Y to anx
Qerson, and also SQecify, for Qurchase of electricitv from
such sources, a Qercentage of the total consumQtion of
electrici!Y in the area of a distribution licensee;
(f) adjudicate UQon the disQutes between the licensees and
generating comQanies and to refer anx disQute for arbitration;
GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
127
SEMICONDUCTOR POWER CO. (I) PVT. LTD. [KURIAN, J.]
(g) levy fee for the purposes of this Act;
A
(h) specify State Grid Code consistent with the Grid Code
specified under clause (h) of sub-section ( l) of section 79;
(i)
specify or enforce standards with respect to quality,
continuity and reliability of service by licensees;
B
G) ·fix the trading margin in the intra-State trading of electricity,
if considered, necessary;
·. (k) discharge such other functions as may be assigned to. it
under this Act."
(Emphasis Supplied)
C
5. Section 92 of the Act provides for the proceedings of the
Appropriate Commission.
"92. Proceedings of Appropriate Commission. - (1) The
Appropriate Commission shall meet at the head office or any
other place at such tiIJle as the Chairperson may direct, and shall D
observe such rules of procedure in regard to the transaction of
business at its meetings (including the quorum at its meetings) as
it may specif)'."
(Emphasis Supplied)
6. Section 94 deals with the powers of the Appropriate Commission
E
and reads as follows:
"94. Powers of Appropriate Commission.- ( l) The
Appropriate Commission shall, for the purposes of any inquiry
or proceedings under this Act, have the same powers as are
F
vested in a civil court under the Code of Civil Procedure, l 908
(5 of l 908) in respect of the following matters, namely:-
( a) summoning and enforcing the attendance of any person and
examining him on oath;
(b) discovery and production of any document or other material G
object producible as evidence;
( c) receiving evidence on affidavits;( d) requisitioning of anypublic
record;
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[2017] 14 S.C.R.
( e) issuing commission for the examination of witnesses;
(f) reviewing its decisions, directions and orders;
(g) any other matter which may be prescribed.
(2) The Appropriate Commission shall have the powers to pass
such interim order in any proceeding, hearing or matter before
the Appropriate Commission, as that Commission may consider
appropriate.
(3) The Appropriate Commission may authorise any person, as
it deems fit, to represent the interest of the consumers in the
proceedings before it."
(Emphasis supplied)
7. Section 95 states that the proceedings before the Appropriate
Commission .shall be deemed to be judicial proceedings and the
D Appropriate Commission shall be deemed to be a civil court. To quote:-
"95. Proceedings before Commission.- All proceedings before
the Appropriate Commission shall be deemed to be judicial
proceedings within the meaning of Sections 193 and 228 of the
Indian Penal Code (45 of 1860) and Appropriate Commission
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shall be deemed to be a civil court for the purposes of Sections
345 and346 oftheCodeofCriminal Procedure, 1973 (2 ofl974)."
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8. Section 181 of the Act provides for the power of the State
Commission to make regulations. To the extent relevant, the Section
reads as follows:
"181. Powers of State Commissions to make regulations.-
( 1) The State Commissions may, by notification, make regulations
s;onsistent with this Act and the rules generally to carry out the
provisions of this Act.
(2) In particular and without prejudice to the generality of the
power contained in subsection (1 ), such regulations may provide
for all or any of the following matters, namely:-
xxx
xxx
xxx
(zl) rules of procedure for transaction of business under subsection (1) of section 92;"
GUJARAT URJA VIK.AS NIGAM LTD. v. SOLAR
129
SEMICONDUCTOR POWER CO. (I) PVT. LTD. [KURIAN, J.]
xxx
xxx
xxx
(zp) any other matter which is to be, or may be, stiecified."
(Emphasis Supplied)
..
9. As per Notification No. 2 of2004 published 6n 25.08.2004,
A
the Gujarat Electricity RegulatoryCommission has notified the Gujarat
B
Electricity Regulatory Commission (Conduct of Business) Regulations.
Regulations 80 to 82 provide for .saving of inherent power of the
Coillmission, which read as follows:
"80. Nothing in these Regulations shall be deemed to limit or
otherwise affect the inherent power of the Commission to
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make such orders as may be necessary for ends of justice
or to prevent the abuse of the process of the Commission.
81. Nothing in these Regufations shall bar the C9mmission from
adopting in conformity with the provisions of the Acts, a
procedure, which is at variance with any of the provisions
D
of these Regulations, if the Commission, in view ofthe special
circumstances of a matter or class of matters and for
reasons to be recorded in writing, deems it necessary or
expedient for dealing with such a matter or class of matters.
82. Nothing in these Regulations shall, expressly or impliedly,
bar the Commission to deal with any matter or exercise
any power under the Acts for which no Regulations have
been framed. and the Commission may deal with such
matters. powers and functions in a manner it thinks fit.".
(Emphasis Supplied)
10. The Regulation 85 of the Conduct of Business Regulations
reads as follows:
"85. Subject to the provisions of the Acts, the time prescribed
E
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by these Regulations or by order of the Commission for
doing any act may be extended (whether it has already ... G
expired or not) or abridged for sufficient reason by order of
the Commission."
(Emphasis Supplied) ·
.
-·--
.
11. In the-context. of this case, certain provisions pf the Power
-_ Purchase Agreement (hereinafter referred to ~s "the PPA") dated H
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[2017] 14 S.C.R.
A 30.4.2010 between the parties are also relevant. Article 5 of the PPA
deals with "Rates and Charges". Article 5.2 reads as follows :-
"5 .2.GUVNL shall pay the fixed tariff mentioned hereunder for
the period of 25 years for all the Scheduled Energy/Energy
injected as certified in the monthly SEA by SLDC. The tariff is
B
determined by Hon'ble Commission vide Tariff Order for Solar
based power project dated 29.1.2010 (sic).
c
D
Tariff for Photovoltaic project: Rs.15/KWh for First 12
Years and thereafter
Rs. 5/KWh from 13th
Year to 25th Years
•
Above tariff shall apply for solar projects commissioned on or
before Jlfil December 2011. In case, commissioning of Solar
Power Project is delayed beyond 31 fil December 2011, GUVNL
shall pay the tariff as determined by Hon'ble GERC for Solar
Projects effective on the date of commissioning of solar power
project or above mentioned tariff. which ever is lower."
(Emphasis Supplied)
The tariff order dated 29.01.2010 is in exercise of powers under
Sections 6l(h), 62(l)(a), 86(l)(e) and all other powers enabling it in this
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behalf'.
12. Article 8 of the PPA pertains to force majeure events. It
provides for events which constitute force majeure:
"ARTICLE 8
F
FORCE MAJEURE
8.1 Force Majeure Events
(a) Neither Party shall be responsible or liable for or deemed in
breach hereof because of any delay or failure in the performance
of its obligations hereunder (except for obligations to pay money
G
due prior to occurrence of Force Majeure events under this
Agreement) or failure to meet milestone dates due to any event
or circumstance (a "Force Majeure Event") beyond the
reasonable control of the Party experiencing such delay or failure,
including the occurrence of any the following:
H
GUJARAT URJA VIK.AS NIGAM LTD. v. SOLAR
SEMICONDUCTOR POWER CO. (I) PVT. LTD. [KURIAN, J.]
( i) acts of God;
(ii) typhoons, floods, lightening, cyclone, hurricane, drought,
famine, epidemic, plague or other natural calamities;
(iii) acts of war (whether declared or undeclared), invasion or
civil unrest;
(iv) any requirement, actions or omission to act pursuant to any
judgment or order of any court or judicial authority in India
(provided such requirement, or action or omission to act is not
131
A
B
due to the breach by the Power Producer or. GUVNL of any
Law or any of their respective obligations under this Agreement); c
(v) inability despite complying with all legal requirements to obtain,
renew or maintain required licenses or Legal Approvals;
(vi) earthquakes, explosions, accidents, landslides; fire;
(vii) expropriation and/or compulsory acquisition of the Project
· ·in whole or in part by Government Instrumentality;
(viii) chemical or radioactive contamination or ionising radiation;
or
(ix) damage to or breakdown of transmission facilities ofGETCO/
DISCO Ms;
(x) Exceptionally adverse weather conditions which are in excess
of the statistical measure of the last hundred ( 100) years.
xxx
xxx
xxx
8.2 Available Relief for a Force Majeure Event
D
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No party shall be liable for(sic) breach of its obligations pursuant
to this Agreement to the extent that the performance of its
.obligations was prevented, hindered or delayed due to a Force
Maj eure event. For avoidance of doubt, neither Party's obligation
to make payments of money due and payable prior to occurrence
of Force Majeure events under this Agreement shall be suspended G
or excused due to the occurrence of a Force Majeure Event in
respect of such Party."
13. There were also certain communications between the parties
· which are required to be noted. On 19.04.2011 the first respondent
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[2017] 14 S.C.R.
A communicated its intention to change the location. The relevant portion
B
c
D
of the letter reads as follows :-
" ..... Originally the PPA was signed with an intention to develop
the 20 MW Solar PV Project at Village Ajawada, Taluka- Tharad,
District Banaskantha, Gujarat. But due to some unforeseen events
we were unable to procure the Project land at Ajawada village
and identified THREE other Locations to procure the Land and
we had informed the some to your office vide our monthly
Progress Reports.
Now, we are happy to inform you that we have already
acquired 60 acres of Land required for the commissioning of
first two phases of 5 MW at Shivlakha Village, Tal-Bhachau,
Dist.Kutch and enclosing herewith the details and copies of the
documents of the Land procurement. We have (sic) also made
advance Payments for another l 05 acres in the same Location
and will be completing the Land Registration before the end of
this month.
xxx
xxx
xxx
d) We have already informed the details of Land
procurement to GETCO for the necessary survey and
E
commencement of power evacuation process. Hence we kindly
request you to amend the PPA with respect to the change of
Location. We hereby submit the Copies of the documents as
proof of Land Procurement ... "
14. A Supplemental Power Purchase Agreement (hereinafter
F referred to as "the SPPA") was entered into by the parties on 10.05.2011.
Clauses 2.3 and 2.4 of the SPPAread as follows:-
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H
"2.3. Since Mis. SSCPCIPL have changed the location of the
Solar Power Project after lapse of significant time, nori-availability
of Transmission system shall not be considered as a ground for
non-leyy of Liquidated Damages. Mis. SSCPCIPL shall pay
Liquidated Damages even in case of non-availability of
transmission system for evacuation of power by Schedule
Commercial Operation Date.
2.4. All other terms and c-onditions including tariff of Power
Purchase Agreement dated 30!!! April 2010 between GUVNL
GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR
133
.
.
.
.
SEMICONDUCTOR POWER CO. (I) PVT. LTD. [KURIAN, J.]
and Mis. SSCPCIPL shall remain unchanged shall apply mutatis
A
mutandis."
(Emphasis Supplied)
15. It is also necessary to understand how this ,matter reached
this Court. Close to the scheduled commercial operation date, Respondent
No. 1 requested the Commission for an extension of the control period.
B
The petition to the relevant extent reads as foll0ws.
"12. While the Petitioner is making best efforts to overcome the
delays as much as possible, it would not be feasible to complete
the project within the time stipulated. The Petitioner has done its
due diligence and with its commitment to expedite various
C
activities, the Petitioner is optimistic that the project is likely to
be completed by the end of April 2012. The Petitioner has also
issued· a representation to the Department of Energy and
Petrochemicals on November 30, 2011 and to GUVNLpointing
out the various above mentioned reasons for delay. The Petitioner D
in the said letters has sought extension of time till force majeure
issues are resolved ...
PRAYER
13. In view of the above, it is therefore most respectfully submitted
that the Hon'ble Commissio,n may graciously be pleased to:
(i)Extend the 'Control Period' till April 30, 2012 as defined by
this Hon'ble Commission in its Order dated 29!!! January, 2010;
(ii) Pass such other and further orders, as this Hon '.\Jle
· Commission deems fit and proper in the facts and circumstances
of the case."
(Emphasis Supplied)
16. The Commission by order dated 27.01.2012 refused to extend
the control period. To quote :-
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F
"14.3 Article 5.2 of the PPAprovides, inter alia,that "., .. Above
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tariff shall apply for power projects commissioned on or before
31 December 2011. In case, commissioning of Solar Power
Projects is delayed beyond 31 December 2011 ·, GUVNL shall
pay the tariff as determined by Hon'ble GERC for Solar Projects
effective on the day of commissioning of Solar Power Projects
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[2017] 14 S.C.R.
or above mentioned tariff, whichever is lower". This means that
ifthe project is not commissioned within the stipulated period the
existing tariff or the new tariff whichever is lower will apply.
The petitioners have consciously agreed to this provision by
signing the PPA. The Commission has already circulated on 1
November 2011 a discussion paper for determining tariff for Solar
Projects for the second control period whicfr is to start from 29
January 2012. The tariff suggested is lower than the current
tariff. The petitioners have sought extension of the control period
in order to prevent the application of a lower tariff in the event
of not being able to commission the projects within the stipulated
period. The reasons given by them are project specific. The
situations of various projects are widely different. In some cases,
the projects are at an advanced stage. In some other cases the
projects are at an initial stage, and in some cases. even the order
for equipment is yet to be issued. Some of them have asked for
one month and some others have asked as long as six months.
The petitioners have not been able to show that there has been a
problem which is industry-wide and spread over the whole State
or a major part of the State. necessitating an extension of the
control period. On the other hand, a number of projects have
been commissioned or are likely to be commissioned within the
control period indicating that the issues raised by the petitioners
are not industry- wide. If some developers could not complete
the projects, it is not adequate justification why the tariff order
should be modified for extending the control period to give relief
to some project developers.