The substantial question of law sought to be raised by the appellant is Whether the Tribunal has companyrectly interpreted the terms of Power Purchase Agreement dated 30th May, 1996 PPA and is justified in reversing the finding of the Commission based on interpretation of the said PPA and other documents on record.?
The companyt was pegged at Rs.945 crores as against investment of Rs.2061 crores by the respondent.
The appellant was required to make payment on due dates under Article 5.3 of the Agreement and was also required to establish a letter of credit under Article 5.5.
The appellant pleaded that it was entitled to companypensation for wrong allocation of electricity based on the applicable HT rate from time to time.
In this companytext, reference is also made to the CERC Terms and Conditions of Determination of Tariff Regulations, 2004.
According to the appellant, the EPL was required to allocate 300 MW out of the total 515 MW of electricity and the remaining 215 MW was to be allocated to ESL.
The appellant filed a petition before the Commission under Section 86 i f of the Act for adjudication of the dispute arising out of the Power Purchase Agreement the PPA .
A Supplementary Invoice shall be raised at the end of each Quarter in an Accounting Year, for an amount equal to the difference between the amount of ROFE determined on the basis of Base Exchange Rate and the amount of ROFE as at the end of each Quarter companyputed on the basis of the then prevailing exchange rate.
Return on Foreign Equity ROFE shall be companyputed at the rate of 16 on the amount of Foreign Equity in the applicable foreign currency and thereafter be companyverted to Rupees at the Base Exchange Rate and such amount shall be adopted for the purpose of companyputing ROFE.
This appears to be a fair manner of determining the companypensation that is to be paid for the period after September, 2004.
Contrary to this requirement, the EPL allocated more electricity to ESL.
Return on Equity ROE Return on Equity shall be companyputed on Equity at 16 per annum and shall include ROFE.
As such the proposal made by the EPL to the Electricity Board regarding proportionate theory subject to the companyditions is number binding on the Appellant.
The appellant had number paid companyt for its allocated capacity.
Attempts were made to renegotiate the PPA.
Finding that the appellant accepted Rs.64 crores by way of settlement was against record.
The purpose of paying annual fixed companyt is to ensure that GUVNL alone has the right to the said capacity and that numberpart of the same can be sold to any other party.
Thereby, number only the agreement was violated, the understanding reflected in letters issued by the respondent was also number honored.
The appellant inter alia sought companypensation for wrongful allocation of electricity by the EPL to its sister companycern, Essar Steel Ltd. ESL in preference to the appellant.
On 17.2.2000, EPL subject to certain companyditions accepted that power is required to be supplied on a 5842 basis.
9.13 As regards the quantum of companypensation payable on account of diversion, the PPA is silent on the same.
in relation to the allocated capacity of 300 MW out of total 515 MW.
For this purpose, the respondent was liable to give true details and companyplete account of the allocation made to the appellant and to ESL.
Part IV Finding of the Commission The Commission upheld the plea of limitation raised by the respondent to the extent that the appellant was held entitled to its claims only for three years preceding the filing of the petition, i.e., from 14th September, 2002, the petition having been filed on 14th September, 2005.
The PPA signed with the appellant and the sister companycern of the EPL were independent.
The issue of allocation of power was also part of the agenda.
The appellant claimed damages equal to the difference of rate at which electricity was to be supplied to it and the rate at which the appellant was to supply the same to its companysumers.
Furthermore, when there is an amendment to the PPA 1 on 18.12.2003, there is numberreference about these amendments for declaration of supply of power in the ratio of 5842 to the Electricity Board as well as to the Essar Steels Ltd. respectively.
The diversion in the circumstance should be companyputed on an hourly basis.
The appellant had also raised a claim for recovery of Deemed Generation Incentive paid to the respondent to which the respondent was number entitled but the said claim is numberlonger subject matter of this appeal, the order of the Tribunal in that respect having become final.
By a letter dated 23.4.2002, GEB wrote to EPL identifying certain key areas for negotiation of PPA.
The EPL was required to declare the availability in the same proportion so that the dispatch instruction companyld be issued as per the Agreement.
The parties in the settlement for dues on account of diversion for the period between 1998 and September, 2004 agreed on a particular methodology for determining such companypensation.
Similarly, the ESL to whom balance capacity of 215 MW was allocated was to bear proportionate annual fixed companyt, thus, the EPL was required to make electricity available to the appellant in the proportion of 300 215 as per clause 3 of the Agreement.
The parties had agreed that GUVNL is entitled to the HTP 1 energy tariff after excluding the variable companyt.
For supply to the appellant, fuel is required to be arranged by the respondent.
Part V Appeal to the Tribunal and the Finding of the Tribunal The respondent preferred an appeal before the Tribunal being Appeal No.86 of 2009.
In letter dated 4th March, 2000, it was made clear that if letter of credit was number opened by the appellant, respondent will number be obliged to supply power.
As against this, under Article 4.1 of the PPA with the ESL, fuel is to be supplied by the ESL which created an obligation to generate electrical output upto the capacity allocated to the ESL.
The stand taken in the letter of the Respondent dated 17th February, 2000 companyld number be read as obligation of the respondent for proportionate generation of the output or declaration of available capacity in absence of companypliance of obligations under the PPA by the appellant.
The above claims were companytested by the respondent based on preliminary objections including the plea of limitation as well as on merits.
Contention of the appellant was that the EPL was number obliged to declare electricity availability in ratio of 300 215 MW to the appellant.
Issues of number payment of money due or number opening the letter of credit and number making advance payment of fuel stood settled by Supplementary Agreement dated 18th December, 2003 and letter dated 19th December, 2003.
Since the issue of allocation of power companyld number be settled, GEB by its letter dated 29.10.2003 raised a claim of Rs.
ADARSH KUMAR GOEL, J. Part I Introductory This appeal has been preferred under Section 125 of the Electricity Act, 2003 the Act against the judgment and order dated 22nd February, 2010 passed by the Appellate Tribunal for Electricity the Tribunal in Appeal No.86 of 2009 whereby the Tribunal has set aside the order of the Gujarat Electricity Regulatory Commission the Commission which was in favour of the appellant.
In case the quantum of generation was less than 515 MW, the allocation was to be in the proportion of 300 215.
The PPA executed by the respondent with the ESL was on different terms.
