TaxTMI 
TaxTMI 
2017 (4) TMI 1385
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..... 2. Section 63 of the Electricity Act, 2003 provides for procurement of power and determination of tariff by a transparent competitive bidding process. Once this is done, the appropriate Commission is to "adopt" the tariff which is accepted in the competitive bid subject to guidelines that are made by the Central Government. On 19th January, 2005, the Central Government issued detailed guidelines under this provision, which were amended from time to time. On 1st February, 2006, Gujarat Urja Vikas Nigam Limited (GUVNL) issued a public notice inviting proposals for supply of power on long term basis under three different competitive bid processes. The participating bidders were to decide on the tariff and quote such tariff after competing against each other. The bidders were entitled to quote escalable or non-escalable tariff or partly escalable and partly non- escalable tariff, as was considered appropriate by them to cover their respective risks so as to obtain whatever returns are available to them. The best levelised tariff as per certain pre-disclosed criteria was to be followed in order to arrive at the lowest tender. 3. Haryana Utilities also initiated a separate compet....
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....e PPAs were executed by Adani Power with two Haryana entities for supply of 712 MW of power to each of them from the Mundra Power Project. The Haryana State Commission adopted the tariff under Section 63 of the Electricity Act on 31st July, 2008 (The Gujarat State Commission had adopted the tariff under Section 63 for supply of power to GUVNL on 20th December, 2007). An important part of the case on behalf of the respondents is that a change in law in Indonesia took place in 2010 and 2011, which aligned the export price of coal from Indonesia to international market prices instead of the price that was prevalent for the last 40 years. This being the case, in both the cases, Adani Power filed a petition before the Central Electricity Regulatory Commission being Petition No.155 of 2012 on 5th July, 2012 under Section 79 of the Electricity Act seeking relief on the score of the impact of the Indonesian Regulation to either discharge them from the performance of the PPA on account of frustration, or to evolve a mechanism to restore the petitioners to the same economic condition prior to occurrence of the change in law. 6. On 16th October, 2012, the Central Commission held that the P....
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.... by Adani Power to GUVNL and Haryana Utilities was a composite scheme within the meaning of Section 79(1) (b) of the Act and that, therefore, the Central Commission would have jurisdiction to proceed further in the matter. The Appellate Tribunal considered the Supreme Court order dated 31st March, 2015 and felt that the argument of force majeure and change in law could be gone into by it. It ultimately concluded, having regard to the law on frustration contained in the Indian Contract Act, 1872 and the relevant provisions of the PPAs, that force majeure was made out on the facts of these cases and reversed the Commission on this score. It also reversed the Commission on exercise of regulatory powers under Section 79, stating that these powers could not be exercised once there was a PPA entered into under Section 63 of the Act. It also held that change in law provisions do not apply to foreign law and, therefore, changes in Indonesian law did not come within the scope of the provisions. Insofar as changes in Indian law were concerned, it held that the Government Policies that were relied upon, do not constitute 'law'. Accordingly, the matter was remanded to the Commission to find ou....
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....sion has to "determine" tariff under the Act having regard to various factors, whereas under Section 63 of the Act, the Commission does not "determine" but only "adopts" tariff obtained through a transparent process of competitive bidding. This being the case, it is clear that there is no residuary source of power contained in the Commission either in Section 79 or otherwise to fix compensatory tariffs once the tariff is adopted under Section 63. If at all, such tariff can be modified only in accordance with the guidelines issued by the Central Government and not otherwise. They also argued that the Central Commission itself has no jurisdiction in view of the fact that on facts there is no composite scheme for the reason that the generation and sale of electricity from the power project of Adani, under independent PPAs to Gujarat and Haryana Utilities, with different tariffs, and from different generating units selected under different competitive bidding processes, would show that there is no one composite scheme containing uniform tariffs. This being the case, the State Commissions alone would have jurisdiction. It was further argued that there is no change in law, either for the....
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....s to tariffs can both be resolved before the Central Commission. 14. They also countered the submissions on force majeure by stating that the fundamental basis of the contract was the fuel supply agreement that was to be entered into, and pointed out various clauses in the PPAs to show that the fuel supply agreement and imported coal were both very important elements, both in the bid and the PPAs. Non-escalable tariffs do not lead to the conclusion that if a source of coal becomes unavailable in a manner that completely undermines the basis of the bid, the tariff cannot be adjusted. If otherwise they fall within the change in law provision and/or force majeure provision, the mere fact that a non-escalable tariff has been quoted would make no difference. A large part of the argument was centered around the meaning of the expression "frustration" in the Contract Act and the correct construction of clause 12 of the PPA. A large number of authorities, both English and Indian, were cited to show that the contract had become commercially impracticable, and that they would have to fold up operations, which would not be in public interest as the consumers would then have to obtain elect....
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....nduced to set up more and more power plants. This must be consistent with competitiveness among them, which then translates itself into reasonable tariffs that are payable by consumers of electricity. For this purpose, he relied strongly upon Section 3 of the Electricity Act, which states that the Central Government, shall from time to time, prepare a National Electricity Policy and a tariff policy in consultation with the State Governments, and the authority for development of the power system, based on optimal utilization of natural resources. According to him, the National Electricity Policy and tariff policy that are issued from time to time, being statutory in nature, are binding on all concerned. This is, in fact, further recognized by Section 61(i) by which the appropriate Commission, in specifying terms and conditions for determination of tariffs, shall be guided by the National Electricity Policy and tariff policy. The Central Government's role can further be seen even in Section 63, where guidelines that are binding on all are issued by the Central Government in cases where there is a transparent process of bidding. Further, according to him, Section 79(4) also points in ....
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....ccessive Five Year Plans undertook rapid growth expansion by utilizing Plan funds. 1.3 Over a period of time, however, the performance of SEBs has deteriorated substantially on account of various factors. For instance, though power to fix tariffs vests with the State Electricity Boards, they have generally been unable to take decisions on tariffs in a professional and independent manner and tariff determination in practice has been done by the State Governments. Cross-subsidies have reached unsustainable levels. To address this issue and to provide for distancing of government from determination of tariffs, the Electricity Regulatory Commissions Act, was enacted in 1998. It created the Central Electricity Regulatory Commission and has an enabling provision through which the State Governments can create a State Electricity Regulatory Commission. 16 States have so far notified/created State Electricity Regulatory Commissions either under the Central Act or under their own Reform Acts. 2. Starting with Orissa, some State Governments have been undertaking reforms through their own Reform Acts. These reforms have involved unbundling of the State Electricity Boards into....
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....ponsibility of ensuring that the transmission network is developed in a planned and coordinated manner to meet the requirements of the sector. The load dispatch function could be kept with the Transmission Utility or separated. In the case of separation the load dispatch function would have to remain with a State Government organization/company. (iii) There is provision for private transmission licensees. (iv) There would be open access in transmission from the outset with provision for surcharge for taking care of current level of cross subsidy with the surcharge being gradually phased out. (v) Distribution licensees would be free to undertake generation and generating companies would be free to take up distribution licensees. (vi) The State Electricity Regulatory Commissions may permit open access in distribution in phases with surcharge for - (a) current level of cross subsidy to be gradually phased out along with cross subsidies; and (b) obligation to supply. (vii) For rural and remote areas stand alone systems for generation and distribution would be permitted. (viii) For rural areas decentralized manageme....
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....ction (1) (4) The Authority shall prepare a National Electricity Plan in accordance with the National Electricity Policy and notify such plan once in five years: Provided that the Authority while preparing the National Electricity Plan shall publish the draft National Electricity Plan and invite suggestions and objections thereon from licensees, generating companies and the public within such time as may be prescribed: Provided further that the Authority shall - (a) notify the plan after obtaining the approval of the Central Government; (b) revise the plan incorporating therein the directions, if any, given by the Central Government while granting approval under clause (a). (5) The Authority may review or revise the National Electricity Plan in accordance with the National Electricity Policy. 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 ....
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....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 recover....
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....order. 79. Functions of Central Commission. (1) The Central Commission shall discharge the following functions, namely:- (a) to regulate the tariff of generating companies owned or controlled by the Central Government; (b) to regulate the tariff of generating companies other than those owned or controlled by the Central Government specified in clause (a), if such generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one State; (c) to regulate the inter-State transmission of electricity ; (d) to determine tariff for inter-State transmission of electricity; (e) to issue licenses to persons to function as transmission licensee and electricity trader with respect to their inter-State operations; (f) to adjudicate upon disputes involving generating companies or transmission licensee in regard to matters connected with clauses (a) to (d) above and to refer any dispute for arbitration; (g) to levy fees for the purposes of this Act; (h) to specify Grid Code having regard to Grid Standards; (i) to specify and enforce the standa....
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....isions of this Act, is what comes up for decision in the present appeals. It may be noticed that Section 63 begins with a non-obstante clause, but it is a non-obstante clause covering only Section 62. Secondly, unlike Section 62 read with Sections 61 and 64, the appropriate Commission does not "determine" tariff but only "adopts" tariff already determined under Section 63. Thirdly, such "adoption" is only if such tariff has been determined through a transparent process of bidding, and, fourthly, this transparent process of bidding must be in accordance with the guidelines issued by the Central Government. What has been argued before us is that Section 63 is a stand alone provision and has to be construed on its own terms, and that, therefore, in the case of transparent bidding nothing can be looked at except the bid itself which must accord with guidelines issued by the Central Government. One thing is immediately clear, that the appropriate Commission does not act as a mere post office under Section 63. It must adopt the tariff which has been determined through a transparent process of bidding, but this can only be done in accordance with the guidelines issued by the Central Gover....
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.... in a situation where the guidelines issued by the Central Government under Section 63 cover the situation, the Central Commission is bound by those guidelines and must exercise its regulatory functions, albeit under Section 79(1)(b), only in accordance with those guidelines. As has been stated above, it is only in a situation where there are no guidelines framed at all or where the guidelines do not deal with a given situation that the Commission's general regulatory powers under Section 79(1)(b) can then be used. Jurisdiction of the Central Commission 20. The appellants have argued before us that the expression "composite scheme" mentioned in Section 79(1) must necessarily be a scheme in which there is uniformity of tariff under a PPA where there is generation and sale of electricity in more than one State. It is not enough that generation and sale of electricity in more than one State be the subject matter of one or more PPAs, but that something more is necessary, namely, that there must be a composite scheme for the same. 21. In order to appreciate and deal with this submission, it is necessary to set out Section 2(5) of the Act which defines appropriate Government as ....
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....state" in sub- clause (c). This being the case, it is clear that the PPA, which deals with generation and supply of electricity, will either have to be governed by the State Commission or the Central Commission. The State Commission's jurisdiction is only where generation and supply takes place within the State. On the other hand, the moment generation and sale takes place in more than one State, the Central Commission becomes the appropriate Commission under the Act. What is important to remember is that if we were to accept the argument on behalf of the appellant, and we were to hold in the Adani case that there is no composite scheme for generation and sale, as argued by the appellant, it would be clear that neither Commission would have jurisdiction, something which would lead to absurdity. Since generation and sale of electricity is in more than one State obviously Section 86 does not get attracted. This being the case, we are constrained to observe that the expression "composite scheme" does not mean anything more than a scheme for generation and sale of electricity in more than one State. 23. This also follows from the dictionary meaning [(Mc-Graw-Hill Dictionary of Scien....
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....nit of the project will be deemed to be the date of commercial operation of the project) for sale of at least 10% of the capacity of the project to a distribution licensee outside the State in which such project is located." 27. That this definition is an important aid to the construction of Section 79(1)(b) cannot be doubted and, according to us, correctly brings out the meaning of this expression as meaning nothing more than a scheme by a generating company for generation and sale of electricity in more than one State. Section 64(5) has been relied upon by the Appellant as an indicator that the State Commission has jurisdiction even in cases where tariff for inter-State supply is involved. This provision begins with a non-obstante clause which would indicate that in all cases involving inter- State supply, transmission, or wheeling of electricity, the Central Commission alone has jurisdiction. In fact this further supports the case of the Respondents. Section 64(5) can only apply if, the jurisdiction otherwise being with the Central Commission alone, by application of the parties concerned, jurisdiction is to be given to the State Commission having jurisdiction in respect of t....
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....Central Commission, the appellant is entitled to argue in the pending Appeals Nos. 98 and 116 of 2014 both the grounds of "force majeure" and "change of law" not for the purpose of seeking the relief of a declaration of the frustration of the contracts between the appellants and the respondents, thereby relieving the appellant of his obligations arising out of the contracts, but only for the purpose of seeking the alternative relief of compensatory tariff. In other words, the appellant's submission is that the facts which formed the basis of the submission of the frustration of contracts are also relevant for supporting the conclusion of the National Commission that the appellant is entitled for the relief of compensatory tariff. 17. We agree with the respondents that we are not required to go into the question of the applicability of Order 41 Rule 22 in the instant appeal as the decision of the Appellate Tribunal to reject the cross-objections of the appellant by its order dated 1-8-2014 has become final and no appeal against the said order is pending before us. 18. We are also not required to go into the question whether the order of the Central Commission d....
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.... of 21st February, 2014, which quantified compensatory tariff, the correctness of which is under challenge in Appeal Nos.98 and 116 of 2014. This being the case, it is clear that this Court did not give any truncated right to argue force majeure or change of law. This Court explicitly stated that both force majeure and change of law can be argued in all its plenitude to support an order quantifying compensatory tariff so long as the appellants do not claim that they are relieved of performance of the PPAs altogether. This being the case, we are of the view that the preliminary submission of the appellant before us is without any force. Accordingly, the Appellate Tribunal rightly went into force majeure and change of law. 32. "Force majeure" is governed by the Indian Contract Act, 1872. In so far as it is relatable to an express or implied clause in a contract, such as the PPAs before us, it is governed by Chapter III dealing with the contingent contracts, and more particularly, Section 32 thereof. In so far as a force majeure event occurs de hors the contract, it is dealt with by a rule of positive law under Section 56 of the Contract. Sections 32 and 56 are set out herein: ....
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....ties. If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the act which he had promised to do. It was further held that where the Court finds that the contract itself either impliedly or expressly contains a term, according to which performance would stand discharged under certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Act. If, however, frustration is to take place de hors the contract, it will be governed by Section 56. 35. In M/s Alopi Parshad & Sons Ltd. v. Union of India, 1960 (2) SCR 793, this Court, after setting out Section 56 of the Contract Act, held that the 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 a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all ant....
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....n 'Treitel on Frustration and Force Majeure', 3rd edition, the learned author has opined, at paragraph 12-034, that the cases provide many illustrations of the principle that a force majeure clause will not normally be construed to apply where the contract provides for an alternative mode of performance. It is clear that a more onerous method of performance by itself would not amount to an frustrating event. The same learned author also states that a mere rise in price rendering the contract more expensive to perform does not constitute frustration. (See paragraph 15-158) 39. Indeed, in England, in the celebrated Sea Angel case, 2013 (1) Lloyds Law Report 569, the modern approach to frustration is well put, and the same reads as under: "111. In my judgment, the application of the doctrine of frustration requires a multi-factorial approach. Among the factors which have to be considered are the terms of the contract itself, its matrix or context, the parties' knowledge, expectations, assumptions and contemplations, in particular as to risk, as at the time of the contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supe....
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.... combination of events and circumstances including those stated below that wholly or partly prevents or unavoidably delays an Affected Party in the performance of its obligations under this Agreement, but only if and to the extent that such events or circumstances are not within the reasonable control, directly or indirectly, of the Affected Party and could not have been avoided if the Affected Party had taken reasonable care or complied with Prudent Utility Practices: i. Natural Force Majeure Events: act of God, including, but not limited to lightning, drought, fire and explosion (to the extent originating from a source external to the Site), earthquake, volcanic eruption, landslide, food, cyclone, typhoon, tornado, or exceptionally adverse weather conditions which are in excess of the statistical measures for the last hundred (100) years, ii. Non-Natural Force Majeure Events: Direct Non-Natural Force Majeure Events Nationalization or compulsory acquisition by any Indian Government Instrumentality or any material assets or rights of the Seller or the Seller's contractors; or The unlawful, unreasonable or discriminatory revocation of, or refusal to renew,....
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....y of power by the Seller to the Procurers. If the average Availability of the Power Station is reduced below sixty (60) percent for over two (2) consecutive months or for any non consecutive period of four (4) months both within any continuous period of sixty (60) months, as a result of an Indirect Non Natural Force Majeure, then, with effect from the end of that period and for so long as the daily average Availability of the Power Station continues to be reduced below sixty (60) percent as a result of an Indirect Non Natural Force Majeure of any kind, the Procurers shall make payments for Debt Service, relatable to such Unit, which are due under the Financing Agreements, subject to a maximum of Capacity Charges based on Normative Availability, and these amounts shall be paid from the date, being the later of a) the date of cessation of such Indirect Non Natural Force Majeure Event and b) the completion of sixty (60) days from the receipt of the Financing Agreements by the Procurer(s) from the Seller, in the form of an increase in Capacity Charge. Provided such Capacity Charge increase shall be determined by CERC on the basis of putting the Seller in the same economic posi....
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....e Test, as per Article 8.1, of the Unit(s) Commissioned earlier and now affected by Direct or Indirect Non Natural Force Majeure Event (or Natural Force Majeure event affecting the Procurer/s), where such Testing is possible to be undertaken in spite of the Direct or Indirect Non Natural Force Majeure Event (or Natural Force Majeure Event affecting the Procurer/s), and the Independent Engineer accepts and issues a Final Test Certificate certifying such Unit(s) being capable of delivering the Contracted Capacity and being Available, had there been no such Direct or Indirect Non Natural Force Majeure Event (or Natural Force Majeure Event affecting the Procurer/s). In case, the Available Capacity as established by the said Repeat Performance Test (provided that such Repeat Performance Test, the limitation imposed by Article 8.1.1 shall not apply) and Final Test Certificate issued by the Independent Engineer is less than the Available Capacity corresponding to which the Seller would have been paid Capacity Charges equal to Debt Service in case of Indirect Non Natural Force Majeure Event (or Natural Force Majeure Event affecting the Procurer/s), then the Procurers shall make pro-rata pa....
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.... the contract. Given the fact that the PPA must be read as a whole, and that clauses 12.3 and 12.7(a) are a part of the same scheme of force majeure under the contract, it is clear that the expression "hindered" in clause 12.7(a) really goes with the expression "partly prevents" in clause 12.3. Force majeure clauses are to be narrowly construed, and obviously the expression "prevents" in clause 12.3 is spoken of also in clause 12.7(a). When "prevent" is preceded by the expression "wholly or partly", it is reasonable to assume that the expression "prevented" in clause 12.7(a) goes with the expression "wholly" in clause 12.3 and the expression "hindered" in clause 12.7(a) goes with the expression "partly". This being so, it is clear that there must be something which partly prevents the performance of the obligation under the agreement. Also, 'Treitel on Frustration and Force Majeure', 3rd edition, in paragraph 15-158 cites the English judgment of Tennants (Lancashire) Ltd. v. G.S. Wilson and Co. Ltd., 1917 Appeal Cases 495 for the proposition that a mere rise in price rendering the contract more expensive to perform will not constitute "hindrance". This is echoed in the celebrated j....
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....: "12.4 Force Majeure Exclusions Force Majeure shall not include (i) any event or circumstance which is within the reasonable control of the parties and (ii) the following conditions, except to the extent that they are consequences of an event of Force Majeure: Unavailability, late delivery, or changes in cost of the plant, machinery, equipment, materials, spare parts, fuel or consumables for the Project; Delay in the performance of any contractor, sub-contractors or their agents excluding the conditions as mentioned in Article 12.2; Non-performance resulting from normal wear and tear typically experienced in power generation materials and equipment; Strikes or labour disturbance at the facilities of the Affected Party; Insufficiency of finances or funds or the agreement becoming onerous to perform; and Non-performance caused by, or connected with, the Affected Party's: Negligent or intentional acts, errors or omissions; Failure to comply with an Indian Law; or Breach of, or default under this Agreement or any Project Documents." This clause makes it clear that changes in the cost of fuel, or the agreement beco....
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....n would be permitted in the payment of energy charges [in the manner stipulated in para 4.11 (iii)] if the procurer mandates use of imported fuel for coastal power station in case-2. Clause 4.7. (unamended) Any change in tax on generation or sale of electricity as a result of any change in Law with respect to that applicable on the date of bid submission shall be adjusted separately. Clause 4.7 (amended). Any change in law impacting cost or revenue from the business of selling electricity to the procurer with respect to the law applicable on the date which is 7 days before the last date for RFP bid submission shall be adjusted separately. In case of any dispute regarding the impact of any change in law, the decision of the Appropriate Commission shall apply. 5.4. Standard documentation to be provided by the procurer in the RFQ shall include - (ii) Model PPA proposed to be entered into with the seller of electricity. The PPA shall include necessary details on: Risk allocation between parties; Technical requirements on minimum load conditions; Assured offtake levels; Force majeure clauses as per industry standards; Lead t....
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....rer and the Seller or between the Procurers (jointly) and the Seller, in connection with or arising out of this Agreement including any issue on the interpretation and scope of the terms of this Agreement as provided in Article 17; "Electricity Laws" means the Electricity Act, 2003 and the rules and regulations made thereunder from time to time along with amendments thereto and replacements thereof and any other Law pertaining to electricity including regulations framed by the Appropriate Commission; "Fuel" means primary fuel used to generate electricity namely,", "Fuel Supply Agreements" means the agreement(s) entered into between the Seller and the Fuel Supplier for the purchase, transportation and handling of the Fuel, required for the operation of the Power Station. In case the transportation of the Fuel is not the responsibility of the Fuel Supplier, the term shall also include the separate agreement between the Seller and the Fuel Transporter for the transportation of Fuel in addition to the agreement between the Seller and the Fuel Supplier for the supply of the Fuel; "Law" means, in relation to this Agreement, all laws including Electricity Laws i....
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....f the Income Tax Act, upto the Scheduled Commercial Operation Date of the Power Station, such non- extension shall be deemed to be a Change in Law. 13.1.2 "Competent Court" means: The Supreme Court or any High Court, or any tribunal or any similar judicial or quasi-judicial body in India that has jurisdiction to adjudicate upon issues relating to the Project. 13.2 Application and Principles for computing impact of Change in Law While determining the consequence of Change in Law under this Article 13, the Parties shall have due regard to the principle that the purpose of compensating the Party affected by such Change in Law, is to restore through Monthly Tariff Payments, to the extent contemplated in this Article 13, the affected Party to the same economic position as if such Change in Law has not occurred. Construction Period As a result of any Change in Law, the impact of increase/decrease of Capital Cost of the Project in the Tariff shall be governed by the formula given below: For every cumulative increase/decrease of each Rupees Fifty crores (Rs.50 crores) in the Capital Cost over the term of this Agreement, the increase/decrease in ....
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.... (i) the date of adoption, promulgation, amendment, re-enactment or repeal of the Law or Change in Law; or (ii) the date of order/judgment of the Competent Court or tribunal or Indian Governmental Instrumentality, if the Change in Law is on account of a change in interpretation of Law. 13.4.2 The payment for Changes in Law shall be through Supplementary Bill as mentioned in Article 11.8. However, in case of any change in Tariff by reason of Change in Law, as determined in accordance with this Agreement, the Monthly Invoice to be raised by the Seller after such change in Tariff shall appropriately reflect the changed Tariff. 17.3.1 Where any Dispute arises from a claim made by any Party for any change in or determination of the Tariff or any matter related to Tariff or claims made by any Party which partly or wholly relate to any change in the Tariff or determination of any of such claims could result in change in the Tariff or (ii) relates to any matter agreed to be referred to the Appropriate Commission under Articles 4.7.1, 13.2, 18.1 or clause 10.1.3 of Schedule 17 hereof, such Dispute shall be submitted to adjudication by the Appropriate Commission. Appea....
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....at least textually it is clear that "all laws" would have to be read with "in force in India" and would, therefore, refer only to Indian laws. Even otherwise, from a reading of clause 13, it is clear that clause 13.1.1 is in four different parts. The first part speaks of enacted laws; the second speaks of interpretation of such laws by Courts or other instrumentalities; the third speaks of changes in consents, approvals or licences which result in change in cost of the business of selling electricity; and the fourth refers to any change in the declared law of the land for the project, cost of implementation of re- settlement and rehabilitation or cost of implementing the environmental management plan. 'Competent Court' in clause 13.1.2 is defined as meaning only the judicial system of India. 49. First and foremost, the expression "any law" occurs in both sub- section (1) and sub-section (2) of clause 13.1.1, which expression must be given the same meaning in both sub-sections. This being the case, as in sub-clause (2), this expression would refer only to Indian law, the same meaning will have to be given to the very same expression in sub-clause (1). Even otherwise, sub-clauses ....
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....side India or within India. The meaning will have to remain the same whether coal is sourced wholly in India, partly in India and partly from outside, or wholly from outside. This being the case, the meaning of the expression "any law" in clause 13 cannot possibly be interpreted in the manner suggested by the respondents. English judgments and authorities were cited for the proposition that if performance of a contract is to be done in a foreign country, what would be relevant would be foreign law. This would be true as a general statement of law, but for the reason given above, would not apply to the PPAs in the present case. 53. However, in so far as the applicability of clause 13 to a change in Indian law is concerned, the respondents are on firm ground. It will be seen that under clause 13.1.1 if there is a change in any consent, approval or licence available or obtained for the project, otherwise than for the default of the seller, which results in any change in any cost of the business of selling electricity, then the said seller will be governed under clause 13.1.1. It is clear from a reading of the Resolution dated 21st June, 2013, which resulted in the letter of 31st Ju....
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.... iii) higher cost of imported coal to be considered for pass through as per modalities suggested by CERC. 3. Ministry of Coal vide letter dated 26th July 2013 has notified the changes in the New Coal Distribution Policy (NCDP) as approved by the CCEA in relation to be coal supply for the next four years of the 12th Plan (copy enclosed). 4. As per decision of the Government, the higher cost of import/market based e-auction coal be considered for being made a pass through on a case to case basis by CERC/SERC to the extent of shortfall in the quantity indicated in the LoA/FSA and the CIL supply of domestic coal which would be minimum of 65%, 65%, 67% and 75% of LOA for the remaining four years of the 12th Plan for the already concluded PPAs based on tariff based competitive bidding. 5. The ERCs are advised to consider the request of individual power producers in this regard as per due process on a case to case basis in public interest. The Appropriate Commissions are requested to take immediate steps for the implementation of the above decision of the Government. This issues with the approval of MOS(P)I/C. Encl: as above Yours faithf....