Restrictive Scope Of Appellate Jurisdiction U/S 125 Electricity Act Is To Enable Freedom To Statutory Regulator & APTEL To Develop Sectorial Laws: SC
The Supreme Court has held that the restrictive scope of its appellate jurisdiction under Section 125 of the Electricity Act is a necessary measure to enable freedom to the statutory regulators and Appellate Tribunal for Electricity (APTEL) to develop sectorial laws.
The Court upheld the decision of the APTEL granting the extension of the Scheduled Commissioning Date (SCD) under the Force Majeure clause of the Power Purchase Agreement (PPA) signed with the Bangalore Electricity Supply Company Limited (BESCOM). This decision overturns the Karnataka Electricity Regulatory Commission's (KERC) earlier order that reduced the tariff payable to the respondents from Rs. 8.40 per unit to Rs. 4.36 per unit.
A Bench of Justice Pamidighantam Sri Narasimha and Justice Pankaj Mithal observed, “While upholding the decision of the Appellate Tribunal for Electricity we have examined the scope and ambit of our appellate jurisdiction under Section 125 of the Electricity Act, 2003. We have held that the restrictive scope of appellate jurisdiction is a product not only of the statutory preconditions, but also a necessary measure to enable freedom to statutory regulator and Tribunal to develop sectorial laws through a principled and consistent approach.”
Sr. Advocate Yasobant Das and ASG K.M. Nataraj represented the appellant, while Sr. Advocate Basava Prabhu Patil appeared for the respondents.
The State of Karnataka introduced a policy aimed at promoting solar energy projects among land-owning farmers, where solar power plants with capacities between 1-3 MW would sell power to state electricity distribution companies (DISCOMs) at a tariff determined by KERC. The respondents undertook a solar project. Following a Letter of Award, BESCOM and the respondents signed a PPA with KERC’s approval.
However, due to delay caused by land use conversion, grid connectivity, and evacuation approvals, the respondents requested a six-month extension, which was granted by BESCOM. Despite this, KERC subsequently reduced the tariff and imposed liquidated damages, rejecting the extension on the grounds that the force majeure clause did not apply.
APTEL, upon review, entitled the respondents to the benefit of the ‘force majeure’ and an extension of time holding that the respondents could not be blamed for the delay as the time taken by the government authorities to provide approvals was not within their control.
The Supreme Court, while upholding APTEL's order, reiterated the importance of the restrictive scope of appellate jurisdiction under Section 125 of the Electricity Act, 2003. “Having examined the scope of this Court’s exercise of appellate jurisdiction when there is a ‘question of law’ under Section 15Z of the SEBI Act, the position that emerges in this case, it is a little more restrictive as the requirement under Section 125 is not merely a question of a law but a substantial question of law,” the Bench remarked.
The Court found no substantial question of law to interfere with APTEL's decision and rejected BESCOM's appeal, stating that the delays were indeed force majeure events under the PPA, and the tariff reduction imposed by KERC was unjustified.
The Bench clarified that “the APTEL has reappreciated the evidence to find that the delay was not attributable to the respondents but to the government bodies and relevant authorities. We find that there is no error in the APTEL’s approach, and it is reasonable in its reappreciation of evidence.”
Consequently, the Court held, “The APTEL also rightly held that there is no occasion for the imposition of liquidated damages…for the reduction of tariff under…the PPA.”
Accordingly, the Supreme Court dismissed the appeal.
Cause Title: Bangalore Electricity Supply Company Limited v. Hirehalli Solar Power Project LLP & Ors. (Neutral Citation: 2024 INSC 622)
Appearance:
Appellant: Sr. Advocate Yasobant Das; ASG K.M. Nataraj; AOR Garima Jain and Bhabna Das; Advocates Praveen Swarup, Vinayak Sharma, Sharath Nambiar, Vatsal Joshi, Chitransh Sharma, Anuj Udupa, Indira Bhakar, Aaysh Suklani, Shubham Mishra and Arunav Patnaik
Respondents: Sr. Advocate Basava Prabhu Patil; AAG Prateek K. Chadha; AOR Prerna Priyadarshini, Ujjal Banerjee and V. N. Raghupathy; Advocates Syed Faraz Alam, Atharva Gaur, Aayushman Aggarwal and Sreekar Aechuri