HARYANA POWER PURCHASE CENTRE versus SASAN POWER LTD. & ORS

Citation: [2023] 8 S.C.R. 1 · Decided: 06-04-2023 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 14 · see the full citation network in Lexace

Judgment (excerpt)

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   [2023] 8 S.C.R. 1
HARYANA POWER PURCHASE CENTRE
v.
SASAN POWER LTD. & ORS.
(Civil Appeal No. 11826 of 2018)
APRIL 06, 2023
[K. M. JOSEPH AND B. V. NAGARATHNA, JJ.]
Electricity Laws – Appellate Tribunal for Electricity (APTEL)
and Central Electricity Regulatory Commission (CERC), if
empowered to disregard the express words of a contract and create
a new bargain – Held: In a case where the matter is governed by
express terms of the contract, it may not be open to the Central
Electricity Regulatory Commission even donning the garb of a
regulatory body to go beyond the express terms of the contract –
While it may be open for a regulation to extricate a party from its
contractual obligations, in the course of its adjudicatory power it
may not be open to the Commission by using the nomenclature
regulation to usurp this power to disregard the terms of the contract
– The Appellate Tribunal for Electricity cannot indeed make a new
bargain for the parties – The Tribunal cannot rewrite a contract
solemnly entered into – It cannot ink a new agreement – Such
residuary powers to act which varies the written contract cannot be
located in the power to regulate – The power cannot, at any rate,
be exercised in the teeth of express provisions of the contract – In a
matter where the parties have entered into a contract with express
provisions, it cannot be said that the Tribunal would have power to
disregard the express provisions of the contract on the score that as
it turns out that with passage of time and even change in
circumstances, it is found that the contract cannot be worked except
at a loss for the contractor – Contract.
Electricity Act, 2003: s.79 – Power Plant Project – Special
Purpose Vehicle – Power Purchase Agreement (PPA) – Compensation
due to ‘change in law’ – Special purpose vehicle formed to set up
an Ultra Mega Power Project – Power generated by the successful
bidder was to be supplied through procurers/distribution licensees
(appellant) – Petition u/s.79 of Electricity Act read with the statutory
framework governing procurement of power through competitive
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SUPREME COURT REPORTS
[2023] 8 S.C.R.
bidding and Articles 13 and 17 of the PPA for compensation due to
change in law ‘during the construction period’ – Held: The matter
must be viewed from the prism of the specific provisions defining
the change in law and the actual change in law – On facts, the PPA
contemplates that if the seller is affected by change in law and
wishes to claim change in law, it has to notify the procurers of the
change in law as soon as is reasonably practicable after becoming
aware of the same – There is no material made available indicating
that the procurers have held out that they will be liable – It could
not be a change in law as contemplated in the agreement as it was
not a change in initial consent which was the only case which was
argued in this regard – Parties were clear about how the change in
law had to be compensated and methodology has been set out clearly
– Therefore, any appeal made to the general part in Article 13.2
which speaks about the affected party being restored to the same
economic condition as if such change in law had not occurred cannot
result in departing from the specific formula which has been set in
place – If a certain timelimit is crossed by the procurers in the
performance of its obligations in this regard, the seller (the first
respondent) has been given the right to repudiate the contract – It
is not the case of the first respondent that it purported to repudiate
the contract – On the other hand, it is the common case that the
contract continued to be alive and it has survived subject to the
claims which have been raised thereunder – This would mean that
as the consequences of failure to perform the task having been
provided in the contract in the manner provided, one should not
ordinarily tarry further to ask as to whether this would provide the
premise for a change in law as contemplated under Article 13.1.1 –
Even in terms of the case built around Part II of Schedule 2 to the
PPA under which the performing of the task mentioned in Article
3.1.2A within the time provided was to be treated as a deemed initial
consent, the consequence of failure to do that have been expressly
spelt out – At best or at worst, it could have empowered the first
respondent to rescind the contract – The first respondent has not
been able to demonstrate that there was a change in law.
Do

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