TaxTMI 
TaxTMI 
2010 (7) TMI 1189
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....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 'APTRANSCO' respectively), the Regulatory ....
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.... 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 power nor the authority nor jurisdiction to compe....
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....rection 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 Commission is just a regulator to approve the PPA entered or whether it could determine ....
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....ion 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, constitution of a Central Electricity Regulatory Commission to exercise the powers conferred and ....
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.... 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. In exercise of its powers, the Regulatory Commission claims to have issued licences to Transmissio....
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....atory 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 contracts of bulk supply and trading business of APTRANSCO to DISCOM which was in furtherance to the ear....
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....t 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 incentives under G.O. Ms. No. 93, dated 18.11.1997, which are continued under the orders of the Commission fr....
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.... 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 price will be reworked on the basis of Return on Equity, O & M expenses and the Variable Cost. 8. Besides the above clauses it also provided other terms and conditions un....
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....icity 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 from the NCE developers is within the jurisdiction of the Regulatory Commission under Section 21(4) of the Reform Act, 1998 and also under Section 86(1) of the Electricity Act, 2003. Referring to Section 61 of the Electricity Act, 2003 which cast obligation upon the Regulatory Commissi....
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....ed 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 structure is valid for control period of five years with effect from 1.4.2004. Thereafter, the Commission will review the prices and incentives after consultation with the Developers and licensees. vii. A further review of the individual projects will be undertaken on completion of 10 years from the date of commissioning of the project, by which time the loan is expected to have been sub....
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....ls 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 present case, if so, to what extent? (iv) Does the plea of duress need to be accepted as per settled principles and with reference to the facts of the case? (v) What is the effect of order dated 20.6.2001 having attained finality and even not being questioned in the present proceedings? (vi) What orders can be made by this Court to deal with these appeals to do complete justice between the parties? 17. Fixation of tariff is, prima....
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....g 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 in the domain of legislative activity and the Courts refrain from adverting into this arena. 18. We have to further examine the legality of this issue in the light of the findings that we have recorded on the issues in relation to jurisdiction of the Regulatory Commission to determine/review the tariff. The jurisdiction of this Court is limited in this aspect. This Court has consistently taken the view that it would not be proper for the Court to examine the fixat....
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.... 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 Regulations are not arbitrary and are in conformity with the provisions of the Act, we will now consider whether the High Court could have gone into this issue at all in an appeal filed by the respondent Company. First of all, we notice that the High Court has proceeded to declare the Regulations contrary to the Act in a proceeding which was initiated before it in its appellate power under Section 27 of the Act. The appellate power of the High Court in the instant case is derived from the 1998 Act....
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.... 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 energy sources compares quite favourably with new coal thermal/gas based projects and captive diesel generating sets. While in future the costs of the former are expected to drop, costs of conventional electricity generation will only increase. Referring to the fact that Central Government has introduced several fiscal and other promotional incentives to attract private sector participation in the generation and supply of energy from non-conventional energy sources and consequently the States had also ....
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.... 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 of the Govt. of India and the guidelines published, the Govt. of Andhra Pradesh issued two different GOs on which, the Tribunal as well as all the parties before us have placed heavy reliance. They read as under: ENERGY (RES) DEPARTMENT G.O.MS. NO: 93 DATED: 18-11-1997 ORDER: In the reference 1st read above, the Ministry of Non-Conventional Energy Sources, Government of India have issued guidelines for promotional and Fiscal incentives to be given by State Government for power generation from Non-Conven....
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....pal 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 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: 1. The uniform incentives specified in G.O. Ms. No. 93, dated 18.11.1997 shall be available only to the power projects where fuel used is from non-conventional energy sources wh....
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....ear 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, duties and levies. In other words, all the documents afore stated provide for a review including the guidelines issued by the Govt. of India. 25. At this stage, we may notice that these guidelines are general guidelines and every State was required to act as per its own needs, convenience and by taking a general view, as to, which are the most practical and affordable projects and how they should be carried on by the State. To give meaning to the guidelines that they were 'absolutely mandatory', will not be in conformity with the law relating to interpretation of documents as well as according to the canons of exercise of executive and administrative powers. These guidelines we....
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....ring, 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, Section 11 detailed the functions of the Regulatory Commission and primarily it had advisory as well as regulatory functions. In terms of Section 11(1)(c) it was required to issue licenses in accordance with the provisions of the Act and determine the conditions to be included in the license. However, 11(1)(e) gave it much wider power and duty to regulate the purchase, distribution, supply and utilization of electricity, the quality of service, the tariff and charges payable keeping in view both the interest of the consumer as well as the consideration that the supply and distribution cannot be maintained unless the charges for the electricity supplied are adequately levied and duly collec....
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....tion 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. The expression 'tariff' has been explained in the Law Lexicon with legal Maxims, Latin terms and Words & Phrases (Second Edition 1997) as "determination, ascertainment, a table of rates of export and import duties, in which sense the word has been adopted in English and other European languages and as defined by the law dictionaries the word 'tariff' is a cartel of commerce; a book of rates; a table or catalogue, drawn usually in alphabetical order, containing the names of several kind of merchandise, with the duties or customs to be paid for the same as settled by the authority or agreed between the several princes and States that hold commerce together." 29. It has also been ....
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....ilar 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 legislations under the provisions of Electricity Act, 2003 and with regard to the power of the Regulatory Commission and the scope of the term 'tariff' the Court held as under: 23. Section 52 of the 2003 Act deals with trading of electricity activity. Under Section 52(1), the appropriate Commission may specify the technical requirement, capital adequacy requirement and creditworthiness for being an electricity trader. Under Section 52(2), every trader is required to discharge its duties, in relation to supply and trading in electricity, as may be specified by the appropriate Commission. 24. The standards of performance of licensee(s) may be specified by the appropriate Commission und....
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....ch 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 raised, the core questions, which arise for our consideration, are: (A) Whether recourse to Section 23 of the Act can be taken for issuance of any direction to the generating company? (B) Whether the Commission while applying the provisions of Section 86(1)(b) of the Act could also take recourse to Sections 23 and 60 thereof? (C) Whether equitable allocation of power generated by a generating company is permissible? 32. In the present case we are, primarily, concerned with the answers given by the Court to questions (A) and (B) framed therein, the discussion on the subject and finally the relevant conclusions drawn by the Court in para 140 to 142. The Court elaborately discussed the matter including the fact that some generating compa....
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....39;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 to abide by those terms for ever and it is their legitimate expectation that State is required to comply with those conditions and no other. 35. For proper analysis of the submissions made by the parties, it is necessary for us to examine on what premises the appellants had claimed and the Tribunal has accepted the plea of estoppel. Admittedly, this all begins with the letter dated 7th September, 1993 issued by the Government of India, Ministry of Non-Conventional Energy Sources, New Delhi to the Chief Secretary of the respective States. In this letter, the new strategy action plan of the Ministry in relation to generation of grid quality power from non-conventional energy sources was mentioned in some elaboration and the Ministry had referred to the fact that it had drawn certain guide....
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.... 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-conventional Energy Developers for extension of benefits as afore-referred in relation to all non-conventional energy resources uniformly. Thereafter, the parties took up the matter for annual consideration, which exercise was undertaken by them in terms of the guidelines issued by the State and the Central Government. State of Andhra Pradesh reiterated the incentives and directed that the same would continue for a period of three years in terms of GO Ms. No. 93, whereafter it will be reviewed. The incentives relied upon, on the basis of the guidelines and the issued Government orders are primarily, related to fixation of purchase price of the generated power from Non-Conventional developer/generators and sale of such energy to third parties. In the meanwhile, Regulatory Commission had be....
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....lready 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 20-06-2001 passed by the Commission, while their challenge to the order is pending the decision by the High Court. However, such of the NCE developers who had accepted the earlier order dated 20- 06-2001 and have been selling electricity generated by them to APTRANSCO cannot challenge the jurisdiction of the Commission to review the terms as per the stipulation contained in the order dated 20-6-2001. 36. On the basis of this factual matrix, the respondents claimed that the State Government and the Regulatory Commission both were bound to continue the incentives as were provided to them in furtherance to the letters and orders of Central as well as the State Governments discussed above. They have a legitimate right to expect that these incentives were to be continued indefinitely in the same manner and t....
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....ice 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 equity. Once the ingredients of promissory estoppel are satisfied then it could be enforced against the authorities including the State with very few extra ordinary exceptions to such enforcement. In the United States the doctrine of Promissory Estoppel displayed remarkable vigor and vitality but it is still developing and expanding. In India, the law is more or less settled that where the Government makes a promise knowing or intending that it would be acted upon by the promissory and in fact the promissory has acted in reliance of it, the Government may be held to be bound by such promise. It is a settled canon of law that doctrine of promissory estoppel is not really based on principle of estoppel but is a doctrine evolved by equity in order to prevent injustice. There is no reason why it should be giv....
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....her 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 voluntarily signed the PPA which contained a specific stipulation prohibiting sale of generated power by them to third parties. The agreement also had renewal clause empowering TRANSCO/APTRANSCO/Board to revise the tariff. Thus, the documents executed by these parties and their conduct of acting upon such agreements over a long period, in our view, bind them to the rights and obligations stated in the contract. The parties can hardly deny the facts as they existed at the relevant time, just because it may not be convenient now to adhere to those terms. Conditions of a contract cannot be altered/avoided on presumptions or assumptions or the parties having a second thought that a term of contract may not be beneficial to them at a subsequent stage. They would have to abide by the existing facts, correctness of wh....
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....ere 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 an unambiguous and definite promise, which is otherwise enforceable in law upon which, the parties have acted, comes within the ambit and scope of enforcement of this principle and binding on the parties for their promise and representation. It will be difficult for the Court to hold that the guidelines can take the colour of a definite promise which in the letters of the Central Government itself were proposals to the State Government. Besides that, if for the sake of argument, we treat the State letters/circulars as promise or representations to the private parties like the respondents, even then, they led to the execution of a definite contract between the parties which will purely fall in the domain of contractual law. These contracts specifically provided for review and when reviewed in the year 2001 parties not only accepted the orde....
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....tract 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 defect of undue influence or duress, as the case may be then the consequences in law should follow. It is a settled canon of law that when the consent to agreement is caused by undue influence the agreement is a contract voidable at the option of the parties whose consent was so caused. Even if such party had received any benefit under the terms of the contract the Court could still pass orders as to the voidability or otherwise of the contract but upon such terms and conditions as the Court may deem just. Undue influence or duress is said to be subtle of the fraud whereby mysteries burden over the mind of a victim by insidious approaches. Firstly, there are no facts on record, much less, supported by any documentary or any other evidence to sustain the plea that the contracts (PPAs) are a result of undue influence or duress by the State or ....
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.... 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 culminated into dismissal of the Writ Petitions and/or reference back to the Regulatory Commission for grant of a hearing as per the directions contained in the order of the High Court. 45. Another important aspect of the case is that the learned Counsel appearing for the respondents, particularly, in Appeal No. 2926 of 2006 had stated that they are not arguing in support of the plea of estoppel and duress as decided by the Tribunal in their favour. They had mainly concentrated their submissions on jurisdiction of the Regulatory Commission with respect to withdrawal of incentives and fixation of tariff. These are the contracts which have been executed prior and after the issuance of the order dated 20th June, 2001 and have been acted upon by the parties without any reservation. In view of the fact that no challenge was made to the order dated 20th June, ....
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....tions 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 signed by the parties at different stages. We are also unable to contribute to the view of the Tribunal that the Regulatory Commission has acted in contradiction or conflict with the State policy. The State was certainly not intending to provide incentives and concessions with assurance of buy-back to enable the Non-Conventional Energy developers/generators to sell generated powers to third parties. It must be kept in mind that the policy of the Government of India as well as the State of Andhra Pradesh was for encouraging the developers/generators of Non-conventional Energy to generate electricity for the benefit of public at large with buy back of power being one of the basic features of this policy. Such parameters are obviously subject to change in larger public interest. All these issues, in fact, loose much significance because of the fact that parties ha....
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....o 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 nor before the Tribunal. In fact, the Tribunal has referred to various acts and deeds of the State and consequences thereof, but did not consider it appropriate to implead the State Government as a party to the proceedings. We are of the considered view that presence of the State Government before the Tribunal could have certainly been appropriate, inasmuch as the State would have placed before the Appellate Authority and the Regulatory authorities, its views in regard to revision of incentives as well as the purchase price. We are also constrained to observe that the State of Andhra Pradesh was a necessary, in any case, a proper party in these proceedings. This itself would be a ground for this Court to remit the matter to the Competent Authority, in addition to the other reasons recorded in this judgment. 49. In the present case, the restriction with regard to....
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....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 distribution of electricity on the one hand and to further the objective of distancing the regulatory responsibilities of the Regulatory Commission from the Government and of harmonizing and rationalizing the provisions of the existing laws relating to electricity in India, on the other hand. The object and reasons of Electricity Act, 2003 as well as the Reform Act, 1998 are definite indicators of such legislative intent. The basic objects of these enactments were that the said Regulatory Commission may permit open access in distribution of energy as well as to decentralize management of power distribution through different bodies. The Reform Act, 1998 stated in its objects and reasons that the set-up of power sector in force, at that time, was virtually integrated and functional priorities were getting distorted due to resource-crunch. This has resulted in inadequate i....