TaxTMI 
TaxTMI 
2010 (7) TMI 1189
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....R. Rao, S. Chandra Shekhar, B. Gopal Reddy, Manoj Kumar, R.V. Kameshwaran, Ravi Shastri, Vinita Sasidharan, S. Udaya Kumar Sagar, Bina Madhavan, Advs. for Lawyers' Knit & Co., Anil Kumar Tandale, V.G. Pragasam, Anagha S. Desai, John Mathew, Guntur Prabhakar, Rohit Rao M. and Aribam Guneshwar Sharma, Advs. JUDGMENT Swatanter Kumar, J. 1. Andhra Pradesh Electricity Regulatory Commission (for short 'Regulatory Commission') was created in furtherance to the provisions of the Andhra Pradesh Electricity Reform Act, 1998 (hereinafter referred to as the 'Reform Act, 1998') enacted by the State legislature which received the assent of the President on 21st December, 1998 and became effective w.e.f. 1st February, 1999. The Commission initiated suo motu proceedings for determination of tariff applicable to the Non-Conventional Energy generation projects of Andhra Pradesh, which was to take effect from 1st April, 2004 onwards. After hearing the Non-Conventional Power Project Developers, the Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. and Transmission Corporation of Andhra Pradesh Ltd. (for short referred to as 'NEDCAP' and 'AP....
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....hough the controversy, in the present case, appears to be a narrow one but on examination it is clear that there are various ancillary questions, which need to be decided by the Court, prior to answering the main controversy relating to the jurisdiction and fixation of tariff by the Regulatory Commission. Arguments at great length were addressed by different learned Counsel appearing for the parties. Before we notice the facts in detail or even refer to the contentions raised, it will be appropriate to refer to the issues involved in the case as the entire matter revolves around these questions and answers thereto and the relief granted. For better understanding of the same, let us refer to these questions and answers. The comparative table of the points at issue, that were raised, and the answers thereto are as under: A. Whether a Regulatory Commission has the power, authority and jurisdiction either under the Electricity Act, 2003 or under the A Electricity Reform Act, 1998 to compel the Developers to sell the power generated by them to the State Transmission Utility or Distribution Company? On the point 'A', we hold that the Regulatory Commission has neither the po....
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....ulatory Commission has no power or authority to alter the policy direction issued by the State Government and the said Commission has no executive power nor a plenary power as claimed by it. G. Is not the Commission bound by directions already issued by the State in respect of NCE Developers as well as incentives directed by the given to encourage them? On the point 'G' we hold that the Andhra Pradesh Electricity Regulatory Commission is bound by policy directions already issued by the State Government so long as they are not modified or altered. H. Whether Regulatory Commission could alter or change the PPAs entered between the NCE Developers and Electricity Board/APTRANSCO? On the point 'H', we hold that the Regulatory Commission has no authority to alter or change the PPAs entered between the NCE Developers and Electricity Board/ APTRANSCO I. Whether the procurement arrangement / PPA entered is a statutory contract and if so, whether it could be interfered by the Commission? On the point 'I', we hold that the procurement arrangement/PPA is statutory and the Commission has no authority to interfere with the same. J. Whether the Commiss....
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....Andhra Pradesh on 18th January, 1997 by GO Ms. No. 93, with the object of encouraging generation of electricity from renewable sources of energy, allowed uniform charges to all such projects. After issuance of the above GO Ms. 93 certain ambiguities were noticed by the concerned parties. This resulted in issuance of GO Ms. No. 112 dated 22nd December, 1998 and vide this GO clarifications were issued to the earlier Government order and it clearly provided for uniform implementation of the proposed scheme to all non-conventional energy developers/generators of power. The Andhra Pradesh Electricity Regulatory Commission was constituted under the said Reform Act, 1998 vide notification dated 3rd April, 1999 and the same Commission performing the duties and functions under the above Act continued to be a Commission under and within the meaning of Electricity Act, 2003 as well. This was done by virtue of Section 185 of the Electricity Act, 2003. State Government of Andhra Pradesh notified the Transmission Corporation of Andhra Pradesh to be the State Transmission utility. We may also notice here that the Electricity Regulatory Commissions Act, 1998 also contemplated under Section 3, cons....
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....agreed before us during the course of argument that it is the Electricity Regulatory Commission for the State of Andhra Pradesh for all intent and purposes under the Reform Act, 1998 as well as the Electricity Act, 2003. We must notice, at this stage itself, that the Tribunal has entertained the doubt that since no independent notification was issued under Section 17 of Electricity Regulatory Commission Act, 1998, therefore, it could not exercise the powers vested in the Regulatory Commission under that Act. This may not be the correct position in law. The Regulatory Commission was constituted under the Reform Act, 1998 and an appropriate notification in that behalf was issued. The Electricity Regulatory Commission Act, 1998 stood repealed by the Electricity Act, 2003. The Electricity Act, 2003 specifically recognized and accepted the Commissions constituted under the enactments specified in the schedule to the Act as appropriate Commission. In entry 3 of the said schedule, Reform Act, 1998 has been specifically noticed. In other words, the Regulatory Commission constituted under the Reform Act, 1998 became the appropriate commission under the Electricity Act, 2003 as well. 4. I....
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....il, 2004 was to remain in force. This resulted in filing of the Review Petitions before the Regulatory Commission. In the meanwhile the Govt. of Andhra Pradesh ordered that APTRANSCO shall cease to engage in trading relating functions and that the PPAs entered with the Developers shall vest in DISCOM(s) w.e.f. 10th June, 2004 in terms of Section 39 read with Section 172(b) of the Electricity Act, 2003. The Review Petitions filed by the Developers before the Regulatory Commission came to be dismissed by different orders passed on 5th July, 2004 and 10th July, 2004 respectively. The Review Petition filed by APTRANSCO also came to be dismissed on 11th July, 2004. This resulted in approaching the High Court again, by nine of the developers, filing Writ Petition No. 16621 of 2004. The High Court, vide its order dated 16th September, 2004, permitted the implementation of the revised tariff by APTRANSCO. It further directed that 50% of the differential amount between the old and the revised tariff shall also be paid for the actual power supplied. By GO 58 dated 7th June, 2005, an approval scheme came to be framed under the Reform Act, 1998 to transfer and distribute the assets and contrac....
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....y Commission was not attempting to stop any incentive while referring to the statistics and the market conditions. It was specifically noticed that permitting Non-Conventional Energy Developers to make third party sales would not, at all, be in the interest of organized growth of electricity industry and it would create discrimination between the industrial consumer drawing power from Non-Conventional Energy Developers and the industrial consumers drawing power from APTRANSCO and these two would have to pay two different rates. It also noticed that there will be undue enrichment of the Developers as they were permitted to establish their generation plants with definite benefits which were carried out for years together. While holding that the Regulatory Commission had jurisdiction, it also noticed that the rate approved by the Regulatory Commission on the basis of guidelines issued by the Ministry of Non-Conventional Energy Sources are much higher than the rate permitted by the State Government and in comparison to other States they were favourable to the NCE developers. This reasoning persuaded the Regulatory Commission to pass the following directions: 29. The existing i....
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....ied in the earlier proceedings of 11th November, 1999, 1st April, 2000, 27th January, 2001 and 13th July, 2001 were accepted by the parties. Some of the clauses of the PPA, which have also been heavily relied upon by the learned Counsel for the parties, read as under: ARTICLE 2 PURCHASE OF DELIVERED ENERGY AND TARIFF 2.1 All the Delivered Energy at the interconnection point for sale to APTRANSCO will be purchased at the tariff provided for in Article 2. 2 from and after the date of Commercial Operation of the Project. Title to Delivered Energy purchased shall pass from the Company to the APTRANSCO at the Interconnection Point. 2.2 The Company shall be paid the tariff for the energy delivered at the interconnection point for sale to APTRANSCO at Rs. 2.25 paise per unit with escalation at 5% per annum with 1994-95 as base year and to be revised on 1st April of every year upto the year 2003- 2004. Beyond the year 2003-2004, the purchase price by APTRANSCO will be decided by Andhra Pradesh Electricity Regulatory Commission. There will be further review of purchase price on completion of ten years from the date of commissioning of the project, when the purchase p....
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....latory Commission before analyzing the proposal and objections, noticed: 20. ...as mentioned herein above, the Commission, in this order is not examining any issues concerning the direction contained in the order dated 20.6.2001 that the NCE Developers shall not sell electricity to third parties and they are required to sell electricity only to APTRANSCO. The Commission, in this order, is dealing with only those NCE Developers who had accepted the order dated 20.6.2001 and voluntarily agreed to sell electricity to APTRANSCO on the terms and conditions contained in the order dated 20.6.2001 11. While the Regulatory Commission undertook the review of prices in relation to sale of electricity by Non-Conventional Energy developers, it specifically referred to order in O.P. No. 1075 of 2000, which, in turn, provided for review of sale price and incentives given earlier to the said developers with effect from 1st April, 2004. It also noticed that the PPAs signed by the APTRANSCO and NCE Developers include provisions for such review by the Regulatory Commission with effect from 1st April, 2004. It took the view that review of the price at which APTRANSCO shall purchase power f....
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....lso subject to the following: i. In regard to tariff for Bagasse based co- generation projects, where the Plant Load Factor during a settlement period exceeds 55% (the level at which the fixed cost is expected to be recovered), only incentive of 21.5 paise/unit and variable cost as indicated in para (47) above shall be paid for every unit delivered in excess of the 55% PLF. ii. As regards to tariff for Biomass based power projects, where the Plant Load Factor during a settlement period exceeds 80% (the level at which the fixed cost is expected to be recovered), only incentive of 21.5 paise/unit and variable cost as indicated in para (63) above shall be paid for every unit delivered in excess of 80% PLF. iii. The tariff for mini-hydel power projects is exclusive of Royalty. iv. In the case of tariff for mini-hydel power projects, where the PLF during settlement period exceeds 35%, only an incentive of 21.5 paise/kwh shall be paid for every unit delivered in excess of 35%. v. The tariffs authorized above will be applicable w.e.f. 1.4.2004 to all NCE power plants of respective categories for sale to APTRANSCO. vi. The above tariff ....
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....39 read with Section 172(b) of the Electricity Act, 2003. On 9th June, 2004, the Central Government also authorized the State Transmission Utility to engage in bulk purchase and sell it to DISCOM for a period of one year from 10th June, 2004. With this background, the appeals which were filed before the Appellate Tribunal came up for hearing and some appeals were also filed by DISCOM with APTRANSCO as a party. Appeals from both sides came up, heard and decided by the order dated 2nd June, 2006 impugned in the present case. 16. Now with this factual background, we shall proceed to examine the issues of law raised in the present appeals before this Court. As already noticed, in paragraph 40 of the impugned judgment, the Tribunal had framed as many as 12 points for determination which were answered by it in paragraph 114. The points formulated by the Tribunal, in fact, can be categorized in the following principal heads: (i) Matters relating to jurisdiction of the Commission for fixation of tariff and sale of generated electricity to third party; (ii) Correctness of tariff fixation on merits of the case; (iii) Is the principle of estoppel attracted in the....
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.... the respective Acts. The functions assigned to the Regulatory Commission are wide enough to specifically impose an obligation on the Regulatory Commission to determine the tariff. The specialized performance of functions that are assigned to Regulatory Commission can hardly be assumed by any other authority and particularly, the Courts in exercise of their judicial discretion. The Tribunal constituted under the provisions of the Electricity Act, 2003, again being a specialized body, is expected to examine such issues, but this Court in exercise of its powers under Article 136 of the Constitution would not sit as an appellate authority over the formation of opinion and determination of tariff by the specialized bodies. We would prefer to leave this question open to be considered by the appropriate authority at the appropriate stage. We do not consider it appropriate to go into the merit or de-merit of determination of tariff rates in the appeals. Determination of tariff is a function assigned legislatively to a competent forum/authority. Whether it is by exercise of legislative or subordinate legislative power or a policy decision, if the Act so requires, but it generally falls ....
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....case of West Bengal Electricity Regulatory Commission v. CESC Ltd. (2002) 8 SCC 715 this Court was concerned with determination of tariff by the State Commission, the applicability of principles of natural justice and the scope of interference by the High Court in distinction to the power exercisable by the appellate authority. Stating it to be a function in the nature of legislative power, the Court felt that the principles of natural justice were not attracted and the power of judicial review could hardly be invoked. The Court held as under: 39. Having considered the finding of the High Court, we are of the opinion that though generally it is true that the price fixation is in the nature of a legislative action and no rule of natural justice is applicable (see Shri Sitaram Sugar Co. Ltd. v. Union of India SCC, para 45), the said principle cannot be applied where the statute itself has provided a right of representation to the party concerned. therefore, it will be our endeavour to find out whether, as contended by learned Counsel for the appellants, the statute has provided such a right to the consumers or not. x x x 44. Having held on merits that the R....
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....tate could not have been set at naught on the assumption that the Regulatory Commission is vested with executive powers. Also that Regulatory Commission had proceeded on the basis that it has power to review the rate/incentives given to developers or it has power to issue executive directions. The Tribunal also felt that PPAs are final and binding and there is assumption of power on the part of the Regulatory Commission that they have authority to fix tariff with respect to power generators by taking recourse to provisions of Sections 62, 64 read with Section 86(1) of Electricity Act, 2003. 22. Before we proceed to examine the various provisions under different Acts afore referred, let us once again refer, in precise form, the necessary facts. From the record it appears that on 7th September, 1993 the Ministry of Non-Conventional Energy Sources, New Delhi had written a letter to the Chief Secretary of the different States informing them that under the new strategy and action plan of the ministry special emphasis is sought to be given to generation of grid quality power from non-conventional energy sources, noticing that the average cost of power generation from non-conventional ....
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....f 7th September, 1993 were further clarified by the Government of India, in relation to fixation of purchase price for power produced from non- conventional energy. As per the guidelines commenting or clarifying the earlier guidelines it was stated that the base price applicable to non-conventional energy based power projects based on solar, wind small hydro, biomass etc. shall be equal to the base price of the year in which the PPAs are signed, Clause 2 of the guidelines reads as under: A promoter / developer shall be entitled to receive the base price set out in PPA for all electrical energy delivered from his project to the State grid for the duration of the Power Purchase Agreement. The rate shall be equal to base price in the year of signing of PPA, escalated at a rate of 5% per year for a period of 10 years, from the date of signing of the Power Purchase Agreement. From the end of the 10 years, and for the remaining duration of the Power Purchase Agreement, the new purchase price shall be equal to the purchase price at the end of the 10th year, or the High Tension (HT) tariff prevalent in the State at that time which is higher. 23. In furtherance of the decision o....
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....h year Wind Farm Rs. 4.54- 1st year Rs. 3.19-10th year Waste to Energy Rs. 2.99 - 1st year Rs. 3.19-10th year This order issues with the concurrence of Finance & Planning (Fin.) Department vide their U.O. No. 46291/351/EBS-EFES&T/97, dated: 18.11.1997. (BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH) V.S. SAMPATH SECRETARY TO GOVERNMENT ENERGY (RES) DEPARTMENT G.O. Ms. No. 112 Dated: 22.12.1998 ORDER: In the Government Order cited, certain uniform incentives were extended to the Developers of Power Projects using wind, biomass co-generation, Municipal wastes and mini hydel for promotion of and to encourage generation of electricity from renewable sources of energy. In order to remove certain ambiguities in the implementation of uniform incentives scheme and also to ensure that the incentives contemplated are channelled for promotion and development of non- conventional energy sources, in keeping with the spirit of Government Order cited, the following amendments are issued: In the Government Order cited, certain uniform incentives were extended to the Developers of Power Projects u....
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....ere not permitted to make sale in favour of third party. After the passing of this order the Developers entered into PPAs between the period August 2001 to 2002 and confirmed the acceptance and implementation of the order of 20th June, 2001. While providing different clauses relating to various facets of sale and distribution of generated power, PPAs under Articles 2. 1 and 2.2, which we have already reproduced, contemplate specifically that the purchase of energy by APTRANSCO will be at the tariff provided under Article 2. 2. Article 2. 2 determines the rate at Rs. 2.25 per unit with escalation at 5% per annum with 1994-1995 as base year which is to be revised on 1st April of every year upto the year 2003-2004, beyond which the purchase price by APTRANSCO will be decided by the Regulatory Commission. Still a further review of purchase price is contemplated on completion of 10 years from the date of commissioning of the project when it will be reworked. In other words, there are specific stipulations provided under the PPAs, as well as in the order dated 20th June, 2001, for revision/review of purchase price. Clause 2.3 further clearly says that tariff is inclusive of all taxes, du....
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....ectricity Act, 2003 place an obligation upon the appropriate Commission to determine the tariff in accordance with the provisions of this Act. An application for determination of tariff shall be made by the generating company under Section 64 and the tariff has to be determined by the appropriate Commission and it is also required to specify the terms and conditions for determination of the tariff as per the factors and the guidelines specified under Section 61 of the Act. 27. The Reform Act, 1998 was enacted, primarily, with the object of constituting two separate corporations; one for generation and other for transmission and distribution of electrical energy. The essence was restructuring, so as to achieve the balance required to be maintained in regard to competitiveness and efficiency on the one part and the social objective of ensuring a fair deal to the consumer on the other. This Act is also intended for creation of a statutory regulatory authority. Section 3 of the Act requires the State Govt. to establish by notification a Commission to be known as Andhra Pradesh Electricity Regulatory Commission. This was done by notification dated 3rd April, 1999. As already noticed,....
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....39; has not been defined in any of the Acts, with which we are concerned in the present appeals, despite the fact that the expression 'tariff' has been used repeatedly in both the Acts. Under the Electricity Act, 2003 'tariff' has neither been defined nor explained in any of the provisions of the Act. Explanation (b) to Section 26 of the Reform Act, 1998 states what is meant by 'tariff'. This provision states that 'tariff' means a schedule of standard price or charges or specified services which are applicable to all such specified services provided to the type or types of customers specified in the 'tariff' notification. This is an explanation to Section 26 which deals with licenses, revenues and tariffs. In other words, this explanation may not be of greater help to the Court in dealing with the case of generating companies. Similarly, the expression 'purchase price' has neither been defined nor explained in any of the afore-stated Acts. 28. therefore, in the absence of any specific definition in any of these Acts we will have to depend upon the meaning attached to these expressions under the general law or in common parlance. Th....
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.... Commission is vested with the function for determining the tariff for generation, supply, transmission and billing of electricity etc., as well as regulation of electricity purchase and procurement process of distribution licensees, including price at which electricity shall be procured from the generating companies. With these specific powers in the statute book itself, it cannot be said that procurement of power from the generating companies will not fall within the ambit of powers and functions of the Regulatory Commission. It, as already noted, is a common body performing functions, duties and exercising powers under all these three Acts. This Court had the occasion to deal with somewhat similar issues in the case of PTC India Ltd. v. Central Electricity Regulatory Commission (2010) 4 SCC 603. The Court was, amongst others, dealing with the provisions of Sections 61 to 63 of the Electricity Act, 2003 and regulation making power of the Regulatory Commission. The Court was concerned with other issues as well including the powers of the Tribunal in relation to judicial review etc. but it will be of assistance to us to notice that the Court referred to different kinds of delegated....
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....ure of functions performed by the Regulatory Commissions viz. decision-making and specifying terms and conditions for tariff determination. 27. Section 66 confers substantial powers on the appropriate Commission to develop the relevant market in accordance with the principles of competition, fair participation as well as protection of consumers' interests. Under Sections 111(1) and 111(6) respectively, the Tribunal has appellate and revisional powers. In addition, there are powers given to the Tribunal under Section 121 of the 2003 Act to issue orders, instructions or directions, as it may deem fit, to the appropriate Commission for the performance of statutory functions under the 2003 Act. 31. Similarly, another Bench of this Court in the case of Tata Power Company Ltd. v. Reliance Energy Ltd. 2009 (7) SCALE 513 was primarily, concerned with the role of the generating companies and their right to make choice to sell power to any person or licensee and while referring to the concept of open access, the Court in para 59 of the judgment referred to the issues arising in the case which read as under: Although before us a large number of contentions had been ra....
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....o called incentives. Every document on record refers to the power of the authority/Commission to take a review on all aspects including that of the tariff. One of the relevant consideration for determining the question in controversy is to examine whether the matter falls within the statutory or contractual domain. From various provisions and the documents on record it is clear that Regulatory Commission is vested with the power to revise tariff and conditions in relation to procurement of power from generating companies. It is also clear from the record that in terms of the contract between the parties, the APTRANSCO had reserved the right to revise tariff etc. with the approval of the Regulatory Commission. 34. With some emphasis, the parties had argued the question relating to 'estoppel' and 'legitimate expectation' with reference to the facts of the present case. The contention is raised that by the GOs issued by the State Government as well as the letters of the ministry a representation was made by the Government to the generating companies and they, having altered their positions, have a right to compel the State Government and the Regulatory Commission....
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....rring to certain incentives required to be given to the projects. These incentives only referred to the power purchase price, escalation of 5% with base year 1997-98, wheeling charges, third party sales allowed to a limited extent. These, again, were the guidelines which, in fact, we have referred to in great detail above and were primarily intended to guide the States in taking the respective decisions in that behalf. Again vide GO. Ms. No. 112 dated 22nd December, 1998 referring to the extension of all these uniform incentives, certain amendments were carried out to GO Ms. No. 93 dated 18th November, 1997. Clause 2 of this order referred that the operation of the incentive scheme shall be watched for a period of three years and at the end of three years the Electricity Board shall come up with suitable proposals for review for further continuance of the incentives in that form, or to be modified suitably. Keeping these guidelines in mind, the State of Andhra Pradesh vide GO Ms. No. 93 dated 18th November, 1997, while referring to the guidelines issued by the Government of India for promotional and fiscal incentives, noticed the various representations which were received from Non....
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....ars from the date of commissioning of the project. This PPA as well as the order passed by the Regulatory Commission in the year 2001 remained in force without being questioned in any manner whatsoever before any competent forum and in any case, not to any benefit of respondents. Then came the order dated 20th March, 2004 passed by the Regulatory Commission again, by initiating suo motu proceedings. In this order, the Commission had retained the basic unit price of 2.25 as on 1st April, 1994 and the escalation index of 5% per annum which was to be simple and not compounded every year. In other words, on 1st April, 2001 the price was 3.37/kwh in relation to Wind Power Purchasers. Except varying this price, the order of 2004, in turn, had reiterated the contents of the order of 2001 which, as already noticed, has attained finality. Another factor which we may notice is that in its order dated 7th July, 2004, while clarifying its order dated 20th March 2004, the Commission has clearly observed: 12. It is relevant to clarify that by the order dated 20-03-2004, the Commission is not mandating in any manner those NCE developers who have not accepted the earlier order dated 20-06....
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....ies from time to time were subject to review. In any case, the matter was completely put at rest by the order of 20th June, 2001 and the PPAs voluntarily signed by the parties at that time, which had also provided such stipulations. If such stipulations were not acceptable to the parties they ought to have raised objections at that time or at least within a reasonable time thereafter. The agreements have not only been signed by the parties but they have been fully acted upon for a substantial period. We have already referred to various statutory provisions where the Regulatory Commission is entitled to determine the tariff. In this situation we are unable to agree with the view taken by the Tribunal that Regulatory Commission had no jurisdiction and that fixation of tariff does not include purchase price for buy back of the generated power. 37. The principle of promissory estoppel, even if, it was applicable as such, the Government can still show that equity lies in favour of the Government and can discharge the heavy burden placed on it. In such circumstances, the principle of promissory estoppel would not be enforced against the Government as it is primarily a principle of equ....
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....ssory estoppel against the Board, but certain basic facts of that case needs to be noticed by us. The appellants in that case had neither expressly nor impliedly stated that it has the power to withdraw the incentives and rebate at a time prior to the expiry of three years for which it was granted. Secondly, none of the private parties had voluntarily or even by remotest choice agreed to give up the benefits given to them by clear representation held out by the Board. As is obvious, the power of the Board to increase the general tariff was accepted, but the incentive of rebate was de horse the tariff and thus, promissory estoppel was enforceable against the Board. 39. Another very important dictum of the Court in this judgment was that the power of the Board to fix general tariff as well as discharge of other related functions was held to be quasi-judicial in character. This power of the Board is exercised under the statute as a power-cum-duty and is independent of granting or declining any rebate. In the present case the order dated 20th June, 2001 was fully accepted by the parties without any reservation. After the lapse of more than reasonable time of their own accord they vo....
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.... and arbitrariness. Consideration of public interest and the fact that there cannot be any estoppel against a statute are exceptions. x x x 36. The law which emerges from the above discussion is that the doctrine of promissory estoppel would not be applicable as no foundational fact therefore has been laid down in a case of this nature. The State, however, would be entitled to alter, amend or rescind its policy decision. Such a policy decision, if taken in public interest, should be given effect to. In certain situations, it may have an impact from a retrospective effect but the same by itself would not be sufficient to be struck down on the ground of unreasonableness if the source of power is referable to a statute or statutory provisions. In our constitutional scheme, however, the statute and/or any direction issued there under must be presumed to be prospective unless the retrospectivity is indicated either expressly or by necessary implication. It is a principle of the rule of law. A presumption can be raised that a statute or statutory rule has prospective operation only. 41. In our country, the law of promissory estoppel has attained certainty. It is only....
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....hat it contained unilateral conditions introduced by virtue of Order and approval of the Regulatory Commission, while on the other hand, in para 53 of the Order, it proceeded on the presumption that PPAs are final and binding and still drew the conclusion that the Regulatory Commission could not revise the tariff. Even in the order, no facts have been pointed out which, in the opinion of the Tribunal, constituted duress within the meaning of the Contract Act so as to render the contract voidable. Another aspect of the entire controversy is that none of the generators had challenged the agreements and in fact, except in arguments before the Tribunal no case was made out for the purposes of vitality of the contract or any part thereof. On the contrary, all the generators under all the branches of Non-Conventional Energies, have accepted the contract and proceeded on the basis that the said contracts are binding and still the Regulatory Commission does not have any power or jurisdiction to revise the tariff or deal with the concessions. If the contracts are a result of duress and cannot be given effect, the results could be disastrous for both the sides. If a contract suffers from the....
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.... substantiate such a finding. What was the compulsion and what were the facts which persuaded the Tribunal to take such a view are conspicuous by their very absence. A compulsion leading to execution of a contract is a matter entirely based upon facts. It is difficult for this Court, originally, to infer duress or compulsion in absence of specific pleadings and materials in that behalf. It may also be noticed at the cost of repetition that the order dated 20th June, 2001 was never questioned by any of the parties to any favourable results. Even in these proceedings there is no challenge to the said order which, admittedly, has been acted upon and has attained finality. The power generators/Non-Conventional Energy developers have executed the PPAs without any protest and, in fact, did nothing to challenge such agreements or any part thereof, till passing of the impugned order of 2004. There were some proceedings, without questioning the validity and effectiveness of the order dated 20th June, 2001, carried out by some of the generators before the Andhra Pradesh High Court. Certain interim directions were passed in those proceedings, as already noticed, but finally all proceedings cu....
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.... of the Regulatory Commission including, but not limited to, determination of the structure of tariff for supply of electricity to the consumers. Powers vested in the Regulatory Commission to frame regulations under Section 54 also intend that regulations are to be framed with an object to ensure proper performance of its functions under the Act. In other words, both the State and the Regulatory Commission, are supposed to exercise their respective powers only for the purposes of furthering the cause of the Act. The Commission discharging its statutory functions within the ambit of Sections 11, 12 and 26 of the Reform Act, 1998 as well as Sections 61, 62 and 86(1)(b) of the Electricity Act, 2003 renders advisory functions to the State. All these provisions, examined and analyzed cumulatively, do not support the approach adopted by the Tribunal that the functions of the Regulatory Commission in fixing tariff/purchase price was contrary to or distinctive of the said policy. This cannot be supported either on the basis of the statutory provisions of the various Acts as well as with reference to the various documents on record including the order dated 20th June, 2001 and the PPAs sign....
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....ould act in consonance with the object of the Act. 48. The appellants have referred and relied upon the policy directions and guidelines framed by the Central Government while the respondents have relied upon these documents as well as the circulars issued by the State of Andhra Pradesh. The respondents have raised the plea of estoppel against the Regulatory Commission on the basis of the averment that the State had framed policies, which the Regulatory Commission instead of implementing, has acted contrary thereto. There is no doubt that before the formation of the Regulatory Commission it was the State Electricity Board which was performing all the functions in relation to generation as well as distribution of electricity. The Board was directly under the control of the State and the State, in exercise of its general executive powers, had framed policies to encourage Non-conventional Energy developers and producers to come into the field of generation of electricity and had issued the Government orders which we have discussed in some detail above. Strange enough, the State of Andhra Pradesh was neither impleaded as a party to the proceedings before the Regulatory Commission no....
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....nce in this submission and are of the view that it is a matter of some concern, even for the State Government. All these projects, admittedly, were established in furtherance to the scheme and the guidelines provided by the Central Government which, in turn, were adopted with some modification by the State Government. The State Electricity Board implemented the said scheme and initially had permitted sale of generated electricity to third parties, however, subsequently and after formation of the Regulatory Commission which, in turn, took over the functions of the State Electricity Board, the incentives were modified and certain restrictions were placed. The reasons for these restrictions have been stated in the affidavit filed on behalf of the appellants which, as already noticed by us, is not a matter to be examined by this Court in exercise of its extra-ordinary jurisdiction. These matters, essentially, must be examined by expert bodies particularly, when such bodies are constituted under the provisions of a special statute. 51. The basic policy of both the Central as well as the State Government was to encourage private sector participation in generation, transmission and dis....