Power Purchase Agreement deadline met, tariff reduction and damages ruled unjustified due to miscalculated commissioning timeline

The SC upheld the Appellate Tribunal's decision dismissing appeals regarding tariff reduction and liquidated damages for delayed plant commissioning. The court determined that under the Power Purchase Agreement, the Scheduled Commissioning Date was 17.10.2017 (12 months from effective date 17.10.2016), calculated using calendar months per Article 1.2.1(k). Since power injection occurred on 17.10.2017, matching the scheduled date, there was no delay. The Commission erred in applying Article 1.2.1(m) instead of 1.2.1(k) for calculating the commissioning timeline. Therefore, the tariff reduction from Rs. 6.10/kWh to Rs. 4.36/kWh and Rs. 20,00,000 damages were unjustified.

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Issues Involved:
1. Determination of the Scheduled Commissioning Date (SCOD) for the Solar Power Projects.
2. Requirement of actual injection of power for determining the date of commissioning.
3. Imposition of liquidated damages and reduction of tariff.

Issue-wise Detailed Analysis:

1. Determination of the Scheduled Commissioning Date (SCOD) for the Solar Power Projects:
The central dispute was whether the SCOD was 16.10.2017 or 17.10.2017. The Karnataka Electricity Regulatory Commission (KERC) held that the SCOD was 16.10.2017, including the date of approval of the Power Purchase Agreement (PPA) on 17.10.2016. The Appellate Tribunal for Electricity, however, excluded 17.10.2016 from the computation, making the SCOD 17.10.2017. The Supreme Court agreed with the Tribunal, emphasizing the definition of "Month" in the PPA, which excludes the date of the event. Therefore, the SCOD was determined to be 17.10.2017.

2. Requirement of actual injection of power for determining the date of commissioning:
The KERC held that actual injection of power into the Grid was essential to declare the project commissioned, which occurred on 17.10.2017. The Appellate Tribunal disagreed, relying on the Commissioning Certificate issued by KPTCL, which stated that the Solar Plants were commissioned on 16.10.2017. The Supreme Court, considering its conclusion on the SCOD, did not find it necessary to adjudicate this point further.

3. Imposition of liquidated damages and reduction of tariff:
The Respondents were penalized by the Appellant for a one-day delay in commissioning, reducing the tariff from Rs. 6.10/kWh to Rs. 4.36/kWh and imposing liquidated damages. The Appellate Tribunal found this unjustified, as the SCOD was 17.10.2017, and the project was commissioned within the stipulated time. The Supreme Court upheld the Tribunal's decision, confirming that there was no delay and the Respondents were entitled to the original tariff.

Conclusion:
The Supreme Court upheld the judgment of the Appellate Tribunal, dismissing the appeals. The SCOD was determined to be 17.10.2017, and the Respondents were not liable for any delay. The imposition of liquidated damages and reduction of tariff by the Appellant was deemed unjustified. The Appellant was granted four weeks to implement the Tribunal's judgment.

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