| Headnote |
Electricity Act, 2003 – Central Electricity RegulatoryCommission (Terms and Conditions for Recognition and issuanceof Renewable Energy Certificate for Renewable Energy Generation)Regulations, 2010 – Power Purchase Agreement (PPA) in terms ofthe REC Regulations 2010 was entered into between the parties, on29.03.2012, within the control period stipulated in the tariff orderof 2010 – On 10.07.2013, Central Commission amended the RECRegulations 2010 (‘Second Amendment’), Explanation to Regulation5 was amended – The pre-existing clause that the power would be“at a price not exceeding pooled cost of the power purchase” wasaltered to “at the pooled cost of power purchase” – It was clarifiedthat PPAs executed prior to this amendment at a tariff lower thanAPCC would not be affected – Respondents filed petition beforethe State Commission arguing that the terms of the PPA had to bechanged in view of the change in the REC Regulations – Allowed –Appellant filed appeal before APTEL, rejected – Review petitionalso dismissed – Held: There was never any provision whichmandated prior approval by the State Commission, of PPAs enteredinto by parties, in exercise of their free choice, in relation torenewable energy sources – Findings of APTEL requiring approvalof the State Commission, unsustainable – Further, it is a matter ofrecord, that for the period between 29.03.2012 and 10.07.2013and indeed, after the Second Amendment, no difficulty wasexperienced in the pricing mechanism agreed by the parties underthe PPA – It was on 10.12.2013 that the respondent wind powerdeveloper approached the State Commission for re-determinationof tariff – This was an opportunistic attempt to derive advantagefrom the change, brought about by the Second Amendment, andseek to have it applied to an existing contract, which cannot be countenanced – Thus, the reasoning of APTEL and the StateCommission cannot be upheld – PPAs entered into voluntarily bythe parties exercising equal bargaining power, before the SecondAmendment were not affected by its terms – Findings to the contraryin the impugned order set aside – Furthermore, APTEL in the mostcavalier fashion virtually rubber stamped the State Commission’sfindings on coercion, in regard to the entering into the PPA by theparties – There was no evidence or any pleadings beyond a bareallegation of coercion against the appellant – Findings regardingcoercion are wholly untenable and therefore, set aside – GujaratElectricity Regulatory Commission (Procurement of Energy fromRenewable Sources) Regulations, 2010 – Regulation 4(1), 9(1).Electricity Act, 2003– Central Electricity RegulatoryCommission (Terms and Conditions for Recognition and issuanceof Renewable Energy Certificate for Renewable Energy Generation)Regulations, 2010 – Objective of – Discussed.Electricity Act, 2003 – s.64 – Tariff Orders u/s.64 – Held: Arequasi-judicial in nature and ipso facto binding on the parties unlessamended or modified through law.Electricity – Power Purchase Agreements, if statutory contracts– Held: Power Purchase Agreements are essentially not statutorycontract showever, certain terms contained in those contracts areregulated by law, i.e. applicable regulations, under the Act – ThePPA between a generating company or, as in the instant case, awind generator, and a distribution licensee, such as the appellant,is the outcome of a carefully considered decision, whereby theparties after due deliberations and negotiations agree on termsbased on existing law and regulations.Pleadings – Standard of – Allegation of coercion/duress/fraud– Findings on, not to be rendered casually by APTEL – Held: It isincomprehensible how an allegation of coercion w.r.t entering intothe PPA by the parties could have been entertained and incorporatedas a finding, given that the respondents are established companieswho enter into negotiations and have the support of experts,including legal advisers, when contracts are finalized – Casualapproach of APTEL in not reasoning how such findings could berendered cannot be countenanced – As a judicial tribunal, dealing with contracts and bargains, which are entered into by parties withequal bargaining power, APTEL is not expected to casually renderfindings of coercion, or fraud, without proper pleadings or proof,or without probing into evidence – Electricity Act, 2003. |
