LexALL INDIA POWER ENGINEER FEDERATION & ORS. versus SASAN POWER LTD. & ORS. ETC.
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[2016] 9 S.C.R. 901 ALL INDIA POWER ENGINEER FEDERATION & ORS. v. SASAN POWER LTD. & ORS. ETC. (Civil Appeal Nos. 5881-5882 of2016) DECEMBER 08, 2016 [KURIAN JOSEPH AND R.F. NARIMAN, JJ.] ELECTRICITY ACT, 2003: ss. 61 to 63 - Commercial Operation Date (COD) - Determination of- Procurement of power from generating companies - Sasan Power Ltd. was incorporated as a special purpose vehicle by Power Finance corporation the nodal agency for procuring power - Power Purchase Agreement (PPA) dated 7.8.2007 executed between Sasan Power Ltd. and procurers of generation and sale of electricity - Article 6 r/w Schedule 5 provided for preconditions to be satisfied for declaration of 'COD' namely readiness to commence commercial operations - This happens only when the pe1formance test by operating the gene1·ating unit at 98% of the contracted capacity as existing on the effective date on a continuous running basis for 72 hours is certified by an independent engineer by giving a final test certificate to the said effect - The date for commissioning the first unit was fixed under the PPA as 7.5.2013 - However, under Schedule 11 thereof. this date was preponed to 27.11.2012 - As Sasan kept postponing this date, the commissioning tests for generating Unit No.3 commenced from 20.3.2013 - Various emails were exchanged from 27.3.2013 to 30.3.2013 between Sasan and WRLDC, a statutory authority under the Act of 2003 - It was the case of Sasan that though they were ready to deliver electricity on 31.3.2013 at 95% of the contracted capacity of 620 MW of the unit, they could not do so as WRLDC did not give them the necessary green signal to go ahead - They relied heavily upon the independent engineer's test certificate dated 30.3.2013 to show that a COD took place on the following day - Petition was filed by WRLDC before the CER Commission challenging the veracity of certificate issued by the independent engineer - Commission arrived at the conclusion that COD had not been achieved on 31.3.2013 but had only been 901 A B c D E F G H 902 A B c D E F G SUPREME COURT REPORTS [2016] 9 S.C.R. achieved tater on 16.8.2013 - Appellate Tribunal set aside the finding of Commission holding that though COD had not been achieved on 31.3.2013 in accordance with the PPA but that the procurers under the PPA had waived their right to demand performance at 95% and that the pe1formance of unit no.3 which was only roughly 17% of its contracted capacity was accepted by all the procurers and that, therefore, there was a waiver of this essential condition which would then entitle the generator to treat 31.3.2013 as the-date on which commercial operation of unit no.3 commenced - Challenged - Held: A perusal of the emails exchanged between the parties show that the parties did not intend to amend any of the provisions of the PPA - The two emails sent by the lead procurer to Sasan read together do not amount to waiver of the right mentioned in clause 6.3.1 - There is no .such clear intention that can be spelled out on a reading of the two emails - All that can be spelled out is that the first email of 31.3.2013 categorically stated that the test result is not as per Article 6.3.1, and is not acceptable - The last sentence of this very email then refers to clause 6.3.4 and to a de-rated capacity of 101.38 MW - Thereafter, email of 2..1.2013 expands on the said last sentence of the earlier email by referring to Article 6.3.4 and Article 11 proviso - This is akin to a 'without prejudice' acceptance of de-rated power, being a non-acceptance of the test certificate dated 30.3.2013 coupled with a desperate attempt to somef10w get whatever power is available - But this does not amount to a clear and unequivocal intention to relinquish a known right - There is no waiver - Appellate Tribunal is wholly incorrect in accepting the case of waiver and is equally incorrect in absolving the, independent engineer for the test cer.tificate given by him on 30.3.2013. ss. 61 to 63 - Electricity tariff- Variation in - Effect on public interest - Held: The moment electricity tariff gets affected, the consumer interest comes in and public interest gets affected - Under s.61, the appropriate commission, when ·it specifies terms and conditions for determination of tariff, is to be guided inter alia by the safeguarding of the consumer interest and the recovery of the cost of electricity in a reasonable man
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