| Headnote |
Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity Board (Gujarat Urja) entered into a power purchase agreement (PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja was under an obligation to purchase and CLP was under the corresponding obligation to supply electricity – Prior PPA, the Central Government had issued notification on 30.03.1992, one of the conditions in it was the provision for incentive to units using naphtha – After the signing of the PPA, an amendment notification dated 06.11.1995 was issued by the Central Government amending the notification (dated 30.03.1992), which provided that there would no longer be any deemed Generation Incentive payable to any generating company on available declaration of naphtha as fuel – Gujarat Urja sought to enforce said notification – However, CLP ignored the amended notification and billed Gujarat Urja for the power supplied, w.e.f. December, 1997 and Gujarat Urja paid deemed Generation Incentive – Thereafter, Gujarat Urja filed application for recovery of the amounts from CLP paid during the period from 1997-1998 to 2005-06 – GERC, by its order held that the notification of 06.11.1995 was applicable and deemed Generation Incentive is not payable to CLP – However, it permitted recovery of only for a period of three years prior to the date of filing of the petition: the recovery for the period prior to 14.09.2002 was held to be time-barred – APTEL upheld the order of the GERC – On appeal, held: The two notifications dated 30.03.1992 and 06.11.1995 were issued u/s. 43(A) of the Electricity Supply Act, 1948 – Concededly, these notifications are statutory and are binding on the parties – Any PPA between a generating company and the purchaser of electricity is subject to such statutory notifications; parties by agreement cannot override statutory provisions, or such notifications, as far as they relate to matters of tariff – So, the notification amended on 06.11.1995 was a statutory one and was binding on both the parties – The effect of this statutory incorporation by way of amendment was that incentive no longer became payable – Also, the concurrent findings of the GERC and APTEL in granting restricted refund calculable for the 3 year period prior to Gujarat Urja’s application are reasonable – The findings of the lower authorities, therefore, are correct; no interference required. Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity Board (Gujarat Urja) entered into a power purchase agreement (PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja was under an obligation to purchase and CLP was under corresponding obligation to supply electricity – A supplementary agreement was executed between the parties on 05.12.2003 – CLP stated that the amount, i.e Rs. 53.90 crores was in fact due as a loan – If it was deemed as a loan, then interest was payable on the basis of normative repayment of principal amount during the period of the loan, i.e. the loan would not remain as a constant – Gujarat Urja resisted this claim – The GERC rejected the CLP’s argument on a plain reading of the clause in the supplementary agreement, which stated that the agreement too recognized Rs.53.9 crores as own Capital for which the cost of Own Capital @ 14% was to be a pass through – The effective date for such recognition was from 01.07.2003 to 31.03.2009 and no amounts were due and payable as interest after that date – This excluded any liability on part of Gujarat Urja for the past period, i.e. December 1997 – The CLP Limited was aggrieved by that portion of GERC’s order which rejected its claim on the deemed loan component prior to the period 2003 – The APTEL concurred with the decision of GERC – On appeal, held: The clear agreement between the parties was that interest on the sum of Rs.53.90 crores was payable for the specified period 01.07.2003 to 31.12.2009 – Therefore, CLP’s claim that any amount was payable, for any period prior to 01.07.2003, was not tenable – Had CLP wished so, nothing prevented it to claim for it during negotiations and have it included as a term of the contract – Once having settled for a specified sum, on an amount Rs.53.90 crores that was only fictionally a loan - and treated as such, for purpose of fixing interest payable, considering the equity infused, in excess of the tariff regulations, the absence of any like item such as interest for prior period, precludes a claim – The findings of the lower authorities are therefore, sound and reasonable |
