Appeal No. 132 of 2015. Case: Atria Brindavan Power Ltd. Vs Karnataka Electricity Regulatory Commission and Ors.. APTEL (Appellate Tribunal for Electricity)

Case NumberAppeal No. 132 of 2015
CounselFor Appellant: Sridhar Prabhu, Anantha Narayana M.G. and Tarun Gulia, Advs. and For Respondents: Swapna Seshadri, Neha Garg and Sandeep Rajpurohit, Advs.
JudgesRanjana P. Desai, J. (Chairperson) and I.J. Kapoor, Member (T)
IssueElectricity Act, 2003 - Sections 111, 2, 31, 39
Judgement DateMarch 01, 2017
CourtAPTEL (Appellate Tribunal for Electricity)


I.J. Kapoor, Member (T)

  1. The present Appeal is being filed by Atria Brindavan Power Ltd. (herein after referred to as the "Appellant") under Section 111 of the Electricity Act, 2003 challenging the Order dated 13.11.2014 ("Impugned Order") passed by the Karnataka Electricity Regulatory Commission (hereinafter referred to as the "State Commission') passed in OP No. 26 of 2013, in the matter regarding termination notice of PPA dated 20.1.2005 between Respondent No. 2 on account of default in payment and consequential grant of intra state open access for sale of power to third parties.

  2. The Appellant, Atria Brindavan Power Ltd. is a Generating company registered under Companies Act, 1956 within the meaning of sub-section 28 of section 2 of the Electricity Act, 2003.

  3. The Respondent No. 1 i.e. Karnataka Electricity Regulatory Commission (KERC) is the Electricity Regulatory Commission for the State of Karnataka exercising jurisdiction and discharging functions in terms of the Electricity Act, 2003.

  4. The Respondent No. 2 i.e. Chamundeswari Electricity Supply Corporation Ltd. is the Distribution Licensee in the State of Karnataka.

  5. The Respondent No. 3 is the State Load Despatch Centre established under section 31 of the Electricity Act, 2003.

  6. The Respondent No. 4 i.e. Karnataka Power Transmission Corporation Ltd. is the State Transmission Utility under Section 39 of the Electricity Act, 2003.

  7. Facts of the present Appeal:

    a) The Appellant owns and operates a 12 MW mini hydro based power project established on left bank of Krishnaraja Sagar Dam, Mandya District in the State of Karnataka. The Appellant had executed Power Purchase Agreement (PPA) dated 20.01.2005 with Respondent No. 4, which was assigned to Respondent No. 2 on 10.06.2005. This PPA is approved by the State Commission. The tariff, payment and other terms and conditions are regulated as per the PPA. The State Commission vide order dated 18.8.2005 approved standardised PPA for procurement of power from Non-Conventional Sources of energy (NCEs) including min-hydel projects.

    b) The whole issue between the Appellant and Respondent No. 2 is due to raising HT bills on the Appellant for imported energy when there is no generation/importing energy more than 10% of the installed capacity and deduction of 115% of the imported energy from energy pumped into the grid instead of that specified in PPA.

    c) The Appellant invoked Article 9.3 of the PPA and issued a payment default notice dated 11.07.2013. The Respondent No. 2 did not agree to the payment default and asked for the details vide letter dated 22.07.2013. Correspondences took place between the Appellant and the Respondent No. 2 for claims and counter claims. Reconciliation meeting was also held between the parties, but no outcome came forth.

    d) The Appellant vide letter dated 21.08.2013 issued termination notice of the PPA and requested the Respondent No. 2 to grant "No Objection Certificate" (NOC) for intra state open access for sale of power to third parties. Respondent No. 2 vide letter dated 24.8.2013 rejected the termination of PPA by the Appellant.

    e) The Appellant filed petition, O.P. No. 26 of 2013 on 11.10.2013 with the State Commission seeking direction to declare the valid termination of PPA and grant of NOC for intra state open access. During the course of hearings the Respondent No. 2 vide letter dated 13.08.2014 requested Appellant to execute supplementary PPA for charging HT industrial tariff from the Appellant. In July, 2013 the Respondent No. 2 also sought clarifications from the State Commission regarding 115% of imported energy deduction vs. 105% (in other PPA dated 19.06.2006 of the Appellant) of imported energy deduction. The State Commission clarified in July, 2013 that 115% of imported energy deduction is valid.

    f) The State Commission vide Impugned Order dated 13.11.2014 rejected the claims of the Appellant.

  8. Aggrieved by the Impugned Order passed by the State Commission, the Appellant has preferred the present appeal on following grounds:

    i. Whether the 2nd Respondent had bona fide reasons for raising HT bills on the Petitioner for the imported energy, when there was no generation?

    ii. Whether 2nd Respondent could have arbitrarily raised HT bills amounting to Rs. 24 per kWh?

    iii. Whether 1st Respondent Commission's clarifications entitled the 2nd Respondent to deduct 115% energy can be deducted in respect of billing of import energy by NCEs?

    iv. Whether the Appellant could terminate the PPA in the event of default?


    The Appellant has raised the following questions of law in the present appeal:

    a. Whether a regulatory commission can supplant reasoning and rationale to a contract or correspondence when there exists none?

    b. Whether a Regulatory Commission can amend the contract without notice or intimation to a contracting party?

    c. Whether a generator can be charged as a HT Consumer without following the regulations, codes and license conditions prescribed for billing consumers for energy by a licensee when a PPA specifically defines the charges to be levied for import the import of energy?

    d. Whether a Commission is justified in permitting a levy of charges when it does not consider that as an item of cost recovery in deciding the tariff?

    e. Whether the quantum of claims is a material consideration in terminating contract and for adjudication of dispute between a generating company and a distribution licensee?

  10. We have heard at length the learned counsel for the parties and considered their arguments and written submissions. Gist of the same is discussed hereunder;

  11. The learned counsel for the Appellant has made following arguments/submissions for our consideration:

    a) The Appellant's PPA was executed on 20.1.2005 before the...

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