Statutory Authorities Should Not Indulge In Practices That Result In Unnecessary Litigation- Karnataka HC Observes

A Karnataka High Court Bench of Justice Suraj Govindaraj has observed that "The statutory authorities like respondents No.2 and 3, in my considered opinion cannot indulge in such kind of practices and it is these kind of practices which have resulted in unnecessary litigation between the power producers and these statutory authorities".

Counsel Shridhar Prabhu appeared for the petitioner, while Senior Counsel S Sriranga, among others, appeared for the respondents.

In this case, a writ petition was filed against an order passed by the Karnataka Electricity Regulatory Commission, praying for an issue of a writ of certiorari. The Government of Karnataka had issued a notice inviting tender for participation for the generation of solar power through Karnataka Renewable Energy Limited (KREDL). The petitioner applied for the establishment of a 2 MW capacity plant.

Subsequently, the petitioner executed a Power Purchase Agreement. However, there were several bottlenecks to the establishment of the plant. Owing to the same, the Government revised the applicable tariff from Rs.8.40/- to Rs.6.51 per unit.

Despite the commissioning certificate having been issued, the respondent contended that there was no such commissioning since there was no flow of electricity in the lines, the commissioning would be said to be complete only on flow of electricity. In light of the same, it was contended that the petitioner would be entitled to a revised generic tariff of Rs. 4.36 and not the earlier tariff of Rs.6.15 per Unit. 

Aggrieved, the petitioner approached KERC, wherein the claim was dismissed. Subsequently, the petitioner approached the High Court.

On the basis of the submissions of the parties, the Court formed the following issues for consideration and answered them accordingly.

1) Whether this Court could take up the matters in view of the submissions made by the counsel for the respondent that there is an alternative efficacious remedy to the APTEL?

The Court observed that "Insofar as the authority being vested with the KERC to determine and fix the tariff is concerned, there cannot be any dispute. The issue in the present case is not as much as fixation of tariff but is as relating to whether the plant had been commercially commissioned or not. The date on which the commissioning happens would determine the tariff applicable, the verification of the said date or otherwise would not require fixation of tariff by this Court". 

Further, it was also held that the Court could take up the matters and the availability of an alternative and efficacious remedy by filing an appeal would not come in the way for it to exercise its jurisdiction.

2) Whether the commissioning certificate issued by the BESCOM and KPTCL authorities in favour of the petitioner be deemed to be sufficient to comply with the commercial operation date in terms of Article 1.1.(vii) of the Power Purchase Agreement?

The Court noted "in the present matter there is no requirement of injection of electricity into the grid to denote commissioning of the plant. The commissioning certificate issued by officers of KPTCL/BESCOM, respondents No.2 and 3 is self-sufficient".

In light of the same, it was held that in terms of clause (vii) of Article 1.1., the requirement only being of a certification by KPTCL/BESCOM, the same has been complied, resulting in commissioning of the plant within the timeframe.

3) Whether the Supplementary Power Purchase Agreement would require permission and sanction of the KERC even if Power Purchase Agreement had already received such sanction?

The Court was of the considered view that "PPA having received sanction, the supplementary PPA only seeking of extension of time, in my considered opinion would not require any such sanction as alleged or otherwise. Be that as it may, this was not a ground raised at the earliest point of time and has only been raised as an after thought".

4) Whether the order passed by the KERC suffers any illegality requiring interference at the hands of this Court?

The Court was of the opinion that "The KERC in its Judgment has completely misdirected itself by framing an issue as to whether injection of power into State grid is essential in order to declare that the project is commissioned. The KERC finds faults with the issuance of the commissioning certificate by holding that without confirmation of injection of power into the grid, the commissioning certificate ought not to have been issued".

In light of the same, it was held that "the beneficiary of this reduction of tariff would be both respondents No.2 and 3 and it is with the intention of being such a beneficiary wanting to pay lesser tariff to the petitioner than what the petitioner is entitled to that such a stand has been taken by respondents No.2 and 3, which in my considered opinion is a dishonest stand".

Subsequently, the petition was allowed.

Cause Title: Solvis Energie India Private Limited vs State of Karnataka & Ors.

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