NDLI: Haryana Power Purchase Centre Vs. Sasan Power Ltd. & Ors

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	i f empowered to disregard the express words of a contract Electricity Laws Appellate Tribunal for Electricity (APTEL) Central Electricity Regulatory Commission
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Electricity Act, 2003 (36 of 2003)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Electricity Laws – Appellate Tribunal for Electricity (APTEL)and Central Electricity Regulatory Commission (CERC), i fempowered to disregard the express words of a contract and createa new bargain – Held: In a case where the matter is governed byexpress terms of the contract, it may not be open to the CentralElectricity Regulatory Commission even donning the garb of aregulatory body to go beyond the express terms of the contract –While it may be open for a regulation to extricate a party from itscontractual obligations, in the course of its adjudicatory power itmay not be open to the Commission by using the nomenclatureregulation to usurp this power to disregard the terms of the contract– The Appellate Tribunal for Electricity cannot indeed make a newbargain for the parties – The Tribunal cannot rewrite a contractsolemnly entered into – It cannot ink a new agreement – Suchresiduary powers to act which varies the written contract cannot belocated in the power to regulate – The power cannot, at any rate,be exercised in the teeth of express provisions of the contract – In amatter where the parties have entered into a contract with expressprovisions, it cannot be said that the Tribunal would have power todisregard the express provisions of the contract on the score that asit turns out that with passage of time and even change incircumstances, it is found that the contract cannot be worked exceptat a loss for the contractor – Contract.Electricity Act, 2003: s.79 – Power Plant Project – SpecialPurpose Vehicle – Power Purchase Agreement (PPA) – Compensationdue to ‘change in law’ – Special purpose vehicle formed to set upan Ultra Mega Power Project – Power generated by the successfulbidder was to be supplied through procurers/distribution licensees(appellant) – Petition u/s.79 of Electricity Act read with the statutoryframework governing procurement of power through competitive bidding and Articles 13 and 17 of the PPA for compensation due tochange in law ‘during the construction period’ – Held: The mattermust be viewed from the prism of the specific provisions definingthe change in law and the actual change in law – On facts, the PPAcontemplates that if the seller is affected by change in law andwishes to claim change in law, it has to notify the procurers of thechange in law as soon as is reasonably practicable after becomingaware of the same – There is no material made available indicatingthat the procurers have held out that they will be liable – It couldnot be a change in law as contemplated in the agreement as it wasnot a change in initial consent which was the only case which wasargued in this regard – Parties were clear about how the change inlaw had to be compensated and methodology has been set out clearly– Therefore, any appeal made to the general part in Article 13.2which speaks about the affected party being restored to the sameeconomic condition as if such change in law had not occurred cannotresult in departing from the specific formula which has been set inplace – If a certain timelimit is crossed by the procurers in theperformance of its obligations in this regard, the seller (the firstrespondent) has been given the right to repudiate the contract – Itis not the case of the first respondent that it purported to repudiatethe contract – On the other hand, it is the common case that thecontract continued to be alive and it has survived subject to theclaims which have been raised thereunder – This would mean thatas the consequences of failure to perform the task having beenprovided in the contract in the manner provided, one should notordinarily tarry further to ask as to whether this would provide thepremise for a change in law as contemplated under Article 13.1.1 –Even in terms of the case built around Part II of Schedule 2 to thePPA under which the performing of the task mentioned in Article3.1.2A within the time provided was to be treated as a deemed initialconsent, the consequence of failure to do that have been expresslyspelt out – At best or at worst, it could have empowered the firstrespondent to rescind the contract – The first respondent has notbeen able to demonstrate that there was a change in law. Doctrines / Principles – Principle of contra proferentem –Explained – Held: The principle of contra proferentem is ordinarilyutilised in contracts of insurance and standard form contracts –The principle apparently in substance is that in case of any doubt in its terms, the doubt should be resolved against the party whodrafted the contract.
Judge	Hon'ble Mr. Justice K.M. Joseph
Neutral Citation	2023 INSC 326
Petitioner	Haryana Power Purchase Centre
Respondent	Sasan Power Ltd. & Ors
SCR	[2023] 8 S.C.R. 1
Judgement Date	2023-04-06
Case Number	11826

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