CLP INDIA PVT. LTD. versus GUJARAT URJA VIKAS NIGAM LTD. & ANR.

Citation: [2020] 6 S.C.R. 598 · Decided: 06-05-2020 · Supreme Court of India · Bench: ARUN MISHRA · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 6 S.C.R.
[2020] 6 S.C.R. 598
598
CLP INDIA PVT. LTD.
v.
GUJARAT URJA VIKAS NIGAM LTD. & ANR.
(Civil Appeal No. 2793 of 2010)
MAY 06, 2020
      [ARUN MISHRA, VINEET SARAN AND
S. RAVINDRA BHAT, JJ.]
Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity
Board (Gujarat Urja) entered into a power purchase agreement
(PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja
was under an obligation to purchase and CLP was under the
corresponding obligation to supply electricity – Prior PPA, the
Central Government had issued notification on 30.03.1992, one of
the conditions in it was the provision for incentive to units using
naphtha – After the signing of the PPA, an amendment notification
dated 06.11.1995 was issued by the Central Government amending
the notification (dated 30.03.1992), which provided that there would
no longer be any deemed Generation Incentive payable to any
generating company on available declaration of naphtha as fuel –
Gujarat Urja sought to enforce said notification – However, CLP
ignored the amended notification and billed Gujarat Urja for the
power supplied, w.e.f. December, 1997 and Gujarat Urja paid
deemed Generation Incentive – Thereafter, Gujarat Urja filed
application for recovery of the amounts from CLP paid during the
period from 1997-1998 to 2005-06 – GERC, by its order held that
the notification of 06.11.1995 was applicable and deemed
Generation Incentive is not payable to CLP – However, it permitted
recovery of only for a period of three years prior to the date of
filing of the petition: the recovery for the period prior to 14.09.2002
was held to be time-barred – APTEL upheld the order of the GERC
– On appeal, held: The two notifications dated 30.03.1992 and
06.11.1995 were issued u/s. 43(A) of the Electricity Supply Act, 1948
– Concededly, these notifications are statutory and are binding on
the parties – Any PPA between a generating company and the
purchaser of electricity is subject to such statutory notifications;
parties by agreement cannot override statutory provisions, or such
notifications, as far as they relate to matters of tariff – So, the
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notification amended on 06.11.1995 was a statutory one and was
binding on both the parties – The effect of this statutory
incorporation by way of amendment was that incentive no longer
became payable – Also, the concurrent findings of the GERC and
APTEL in granting restricted refund calculable for the 3 year period
prior to Gujarat Urja’s application are reasonable – The findings
of the lower authorities, therefore, are correct; no interference
required.
Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity
Board (Gujarat Urja) entered into a power purchase agreement
(PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja
was under an obligation to purchase and CLP was under
corresponding obligation to supply electricity – A supplementary
agreement was executed between the parties on 05.12.2003 – CLP
stated that the amount, i.e Rs. 53.90 crores was in fact due as a
loan – If it was deemed as a loan, then interest was payable on the
basis of normative repayment of principal amount during the period
of the loan, i.e. the loan would not remain as a constant – Gujarat
Urja resisted this claim – The GERC rejected the CLP’s argument
on a plain reading of the clause in the supplementary agreement,
which stated that the agreement too recognized Rs.53.9 crores as
own Capital for which the cost of Own Capital @ 14% was to be a
pass through – The effective date for such recognition was from
01.07.2003 to 31.03.2009 and no amounts were due and payable
as interest after that date – This excluded any liability on part of
Gujarat Urja for the past period, i.e. December 1997 – The CLP
Limited was aggrieved by that portion of GERC’s order which
rejected its claim on the deemed loan component prior to the period
2003 – The APTEL concurred with the decision of GERC – On
appeal, held: The clear agreement between the parties was that
interest on the sum of Rs.53.90 crores was payable for the specified
period 01.07.2003 to 31.12.2009 – Therefore, CLP’s claim that any
amount was payable, for any period prior to 01.07.2003, was not
tenable – Had CLP wished so, nothing prevented it to claim for it
during negotiations and have it included as a term of the contract –
Once having settled for a specified sum, on an amount Rs.53.90
crores that was only fictionally a loan - a

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