TaxTMI 
TaxTMI 
2021 (5) TMI 1081
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.... 1200 MWA of Solar power to be implemented in 60 Taluks through private sector participation. Emmvee Photovoltaic Power Private Limited, the second Respondent herein, incorporated two Special Purpose Vehicles (SPV) in accordance with the terms of the Request for Proposal and submitted its bid for acceptance by the first Appellant, Bangalore Electricity Supply Company Limited. (b) Respondent No. 1 in Civil Appeal 9273 of 2019 is a special purpose vehicle constituted by Respondent No. 2 for setting up a Solar PV ground mount Project with a capacity of 10 MWA (AC) in Bidar Rural Taluk, Bidar District, Respondent No. 1 in Civil Appeal 9274 of 2019 is a special purpose vehicle for setting up a 20 MWA (AC) capacity Solar PV ground mount Project in Bagepalli Taluk, Chikkaballapura. (c) The Projects were awarded to the Respondents on 31.03.2016. Power Purchase Agreements (PPAs) were entered into between the parties on 23.05.2016. The Power Purchase Agreements were approved by Karnataka Electricity Regulatory Commission (KERC) on 17.10.2016. Supplementary Power Purchase Agreements were entered into between the parties on 17.12.2016 incorporating the modifications suggested by the Karnat....
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....date for the Solar Power Projects of the Developer is 16.10.2017 and not 17.10.2017 as contended by the Respondents. Considering issues 2, 3, and 4 together, the Commission was of the opinion that the injection of power into the Grid from a Solar Power Project is a sine qua non for declaring that the Project is commissioned. The Commission was of the view that the injection of power from the Solar Power Project into the Grid was only on 17.10.2017. In view of the above findings recorded by the Commission, the OP's were dismissed. 8. The Respondents approached the Appellate Tribunal for Electricity by fling Appeal Nos. 332 and 333 of 2018. The Appellate Tribunal framed the following point for consideration: Whether the Project of the Appellants was delayed by one day in terms of Power Purchase Agreement and whether the Commission was justified in imposing liquidated damages on the Appellant for such delay in commissioning the Project. 9. The Appellate Tribunal held that the Commissioning Date of both the Solar Plants according to KPTCL is 16.10.2017. According to the Tribunal, synchronization took place prior to the commissioning of the Plant. The Tribunal was also of the vi....
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.... for deciding the Scheduled Commissioning Date starts from 17.10.2016 which was the date of approval of PPA by KERC. He referred to several covenants of the PPA to asseverate that the date of the event i.e. the date of approval of PPA has to be excluded for the purpose of computation of twelve months for deciding the Scheduled Commissioning Date (SCOD). There is no dispute regarding injection of power to the Grid on 17.10.2017. Therefore, there is no default on the part of the Respondents and they were unnecessarily penalized. The alternative submission of the Respondents is that even if 17.10.2016 is not excluded, twelve months end on 16.10.2017 on which day the Plants were commissioned. Computation of twelve months from 16.10.2017, in that case, cannot be detrimental to the Respondents. He emphasized that commissioning of the Plant is different from Commercial Operation date. He requested this Court not to interfere with the judgment of the Appellate Tribunal as the Respondents have entered into an agreement on the basis of the offer made by the Appellant to pay tariff at Rs. 6.10/kWh. Any reduction of tariff would sound a death knell to the Solar Plants which are going through d....
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....nearest Delivery Point/Delivery points. Article 5.8-Liquidated Damages for delay in commencement of supply of power to BESCOM 5.8.1. If the Developer is unable to commence supply of power to BESCOM by the Scheduled Commissioning Date other than for the reasons specified in Clause 5.7.1, the Developer shall pay to BESCOM, Liquidated Damages for the delay in such commencement of Supply of power and making the Contracted Capacity available for dispatch by the Scheduled Commissioning Date as per the following: a. For the delay up to one month an amount equivalent to 20% of the Performance Security. b. For the delay of more than one (1) month and upto two months an amount equivalent to 40% of the total Performance Security. In addition to the 20% deducted above. c. For the delay of more than two and upto three months an amount equivalent to 40% of the Performance Security in addition to the 20%+40% deducted above. For avoidance of doubt, in the event of failure to pay the above-mentioned damages by the Developer entitles BESCOM to encash the Performance Security. 5.8.2. In case the Developer delays the achievement of Commercial Operation Date beyond 3 (three) months, the D....
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.... and the Expiry Date. 12.2. Provided further that as a consequence of delay in Commissioning of the Project beyond the Scheduled Commissioning Date, subject to Article 4, if there is change in KERC applicable tariff, the changed applicable Tariff for the Project shall be the lower of the following: I. Tariff at in Clause 12.1 above II. KERC applicable Tariff as on the Commercial Operation Date. ARTICLE 21: DEFINITIONS "COD" or "Commercial Operation Date" shall mean the actual commissioning date of respective units of the Power Project where upon the Developer starts injecting power from the Power Project to the Delivery Point. "Effective Date" shall mean date of Approval of PPA KERC; Month" shall mean a period of thirty, (30) days from (and excluding) the date of the event, where applicable, else a calendar month. Scheduled Commissioning Date" shall mean 12 (twelve) months from the Effective Date. 14. The dispute in these Appeals is whether the Respondents did not commission the Solar Projects before the expiry of 12 months from 17.10.2016 which is the date of approval of PPA by KERC. The conflicting views of the parties relate to the computation of 12 months for t....
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....ackground may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax. (See: Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] 2 WLR 945. (5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Neviera SA v. Salen Rederierna [1985] 1 AC 191, 201: ... if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense. 16. The duty of the Court is not to delv....
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....ceed to advert to the undisputed facts. KERC approved the PPAs on 17.10.2016. Scheduled Commissioning Date according to the agreement should be 12 months from 17.10.2016. There is also no dispute between the parties that 12 months means 365 days. According to the Appellants if 17.10.2016 is included in computation of 365 days, the Scheduled Commissioning Date is 16.10.2017. On the other hand, the Respondents contended that 17.10.2016 should be excluded in the calculation of 365 days, in which case, 17.10.2017 would be the Scheduled Commissioning Date. 19. The Commission relied upon 1.2.1(m) of the PPA to conclude that 17.10.2016 has to be included for ciphering the period of 365 days to determine the Scheduled Commissioning Date. Whereas, the Appellate Tribunal was of the view that Article 1.2.1(k) of the PPA is relevant. The Tribunal held that the date of the event which is the date on which the PPA was approved i.e. 17.10.2016 shall be excluded in calculating the period of 12 months. 20. Reduction of applicable tariff is permissible Under Article 12.2 of the PPA only when there is delay in commissioning of the Project beyond the Scheduled Commissioning Date. As discussed above,....