LexTRANSMISSION CORPN. OF A.P. LTD. & ANR. versus SAI RENEWABLE POWER PVT. LTD. & ORS.
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[2010] 8 S.C.R. 636 A TRANSMISSION CORPN. OF A.P. LTD. & ANR. B c v. SAi RENEWABLE POVVER PVT. LTD. & ORS. (Civil Appeal No. 2926 of 2006 etc.) JULY 8, 2010 [DR. B.S. CHAUHAN AND SWATANTER KUMAR, JJ.] Electricity - Promotion of generation of grid quality power from non-conventional sources -- Guidelines issued by Central Government indicating the purchase price of such electricity - State Government granting uniform incentives to all the projects based on renewable sources of energy - Order reviewing the tariff and imposing restriction on sale to third party - Non-conventional energy developers/generators D accepted and acted upon the order by entering into Power Purchase Agreements - Thereafter State Electricity Regulatory Commission determining the purchase price for procurement of such electricity and also imposing restriction with regard to sale thereof to third party- Propriety of the order E of the Regulatory Commission - Held: It is within the power and jurisdiction of the Regulatory Commission to determine the 'purchase price' and to impose restriction on sale to third party - The Commission was not estopped from altering the purchase rates or imposing restriction on the sale - The F incentives initially provided by the authorities under the guidelines issued by the Central Government and the Power Purchase Agreements were not for indefinite period, but were subject to review - The contracts entered into by the parties provided for review and the restriction for sale to third party - Parties are bound by contractual obligation and such G obligation cannot be frustrated by aid of promissory estoppel - Agreements cannot be said to be result of duress - Duress not proved, so as to render the contract voidable - Conditions of a contract cannot be altered/avoided on presumptions or H 636 TRANSMISSION CORPN. OF A.P. LTD v. SAi RENEWABLE 637 POWER PVT. LTD. assumptions - Determination of tariff is a function assigned A legislatively to Regulatory Commission - Supreme Court in exercise of powers under Article 136 of the Constitution would not sit as an appellate authority over the formation of opinion and determination of tariff by the specialized bodies - Matters remanded to the Regulatory Commission to fix/determine the B tariff for purchase of electricity - Electricity Regulatory Commission Act, 1998 - s. 17 - Andhra Pradesh Electricity Reform Act, 1998 - s. 11 - Electricity Act, 2003 - ss. 61 and 62 r/w. s. 86(1)(a) and (b) - Contract - Promissory Estoppel - Constitution of India, 1950 - Article 136. c Administrative Law: Principle of promissory estoppel - Nature and applicability of - Discussed. Principle of legitimate expectation - Applicability of Judicial Review - Scope of, in policy matters. Maxim - 'Al/egans contraria non est audiendus' - D Applicability of. E Words and Phrases - 'Tariff' and 'Purchase price' - Meaning of Ministry of Non-Conventional Energy Sources of Central Government wrote letter dated 7.9.1993 to F different States informing that under new strategy and action plan of the Ministry, special emphasis would be given to generation of grici quality power from non- conventional sources. Guidelines drawn up by the Ministry were also enclosed with the letter, whereby a G minimum buy back price of Rs. 2.25 per unit was proposed. The transmission of electricity was required to be undertaken by State Electricity Board. In furtherance of the decision of the Central H 638 SUPREME COURT REPORTS (2010] 8 S.C.R. A Government and the Guidelines, State of Andhra Pradesh issued two different Government Orders dated 18.11.1997 and 22.11.1998 granting uniform incentives to all the projects based on renewable sources of energy. The Power Purchase Agreement (PPA) between the appellant- s Corporation (APTRANSCO) and non-conventional power project developers were executed. The A.P. Regulatory Commission passed an order on 20.6.2001 determining the tariff as well as defining other rights and obligations between the parties including that the generators of c electricity were not permitted to make sale in favour of third party. After passing of this order, developers entered into PPAs and confirmed the acceptance and implementation of the order dated 20.6.2001. The PPAs as well as the order dated 20.6.2001 specifically provided 0 for review/revision of purchase price. The order dated 20.6.2001 was never challenged. There
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