IMPORTANT POINT
Jurisdiction of Electricity Regulatory Commission discussed.

Headnote:(a) Andhra Pradesh Electricity Reform Act, 1998 – Section 3 r/w S.11, Electricity Regulatory Commissions Act, 1998 S. 17, Electricity Act, 2003 S. 62, S. 82(1) and S.86 – Fixation of tariff is function of the Regulatory Commission – Tribunal has jurisdiction to examine such issues. (Para 17)
       (b) Constitution of India – Article 136 – Supreme Court would not sit as an appellate authority over the formation of opinion and determination of tariff by the specialized bodies. (Para 17
       (2002) 3 SCC 711; (2002) 8 SCC 715 – Relied upon
       (c) Andhra Pradesh Electricity Reform Act, 1998 – Section 11 and 26, Electricity Act, 2003, Sections 61 and 62 read with Section 86 (1)(a)(b) – In addition to the legal provisions, the PPAs provide for regular review of the tariff – It cannot therefore be said that procurement of power from the generating companies will not fall within the ambit of powers and functions of the Regulatory Commission. (Paras 30, 33 and 47)
       (2010) 4 SCC 603; 2009 (7) SCALE 513; (2004) 1 SCC 195; (2008) 17 SCC 769 – Relied upon
       (d) Estoppel – For the principle of estoppel to be attracted, there has to be a definite and unambiguous representation to a party which then should act thereupon and then alone the consequences in law can follow – The PPAs not only having been signed by the parties but fully acted upon for a substantial period, principle of estoppel cannot be invoked. (Paras 36 and 37)
       (1968) 2 SCR 366; (1970) 1 SCC 582; (1979) 2 SCC 409; (1997) 7 SCC 251 – Relied upon
       (e) Promissory estoppel – Executed documents and conduct of the parties acting upon such agreements over a long period bind them to the rights and obligations stated in the contract – Denying the facts would be hit by the maxim allegans contraria non est audiendus. (Para 39)
       (2008) 13 SCC 213 – Relied upon
       (f) Indian Contract Act, 1872 – Section 19 – Duress – Even in absence of any challenge to the PPAs and any pleadings of duress Tribunal holding the PPAs to be result of undue influence or duress – not sustainable. (Para 42)
       (2002) 9 SCC 667 – Relied upon
       Facts of the case:
       1.Andhra Pradesh Electricity Regulatory Commission initiated suo motu proceedings for determination of tariff applicable to the Non-Conventional Energy generation projects of Andhra Pradesh, which was to take effect from 1st April, 2004. After hearing the Non-Conventional Power Project Developers, the Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. and Transmission Corporation of Andhra Pradesh Ltd., the Regulatory Commission fixed the energy purchase rates at base unit price of Rs. 2.25 as on 1st April,1994 and the escalation index of 5% p.a., but the escalation would be simple and not to be compounded every year. In other words, the base price as on 1st April, 2004 will be Rs.3.37 per kwh. As these projects have no variable expenses and negligible increase in maintenance cost, the tariff will be frozen for a period of five year, which however, is to be reviewed thereafter.
       2.The Commission further restricted the sale, procurement and distribution of electricity by the Developers to any other party except APTRANSCO.
       3.The Tribunal held that The Power Purchase Agreement was a statutory document and the Regulatory Commission had no authority to interfere with the same. It could not even be altered by the Regulatory Commission. One of the most important finding recorded by the Tribunal was that the Regulatory Commission has neither the power nor jurisdiction to compel the Developers to sell the power generated by them to APTRANSCO and/or DISCOM.
       Finding of the Court:
       There was no definite and clear promise made by the authorities to the developers that would invoke the principle of promissory estoppel.
       Impugned order of the Tribunal is not sustainable.
       Result: Impugned order set aside, matter remanded to the Regulatory Commission.

JUDGMENT

Swatanter Kumar, J. —

1.Andhra Pradesh Electricity Regulatory Commission (for short ‘Regulatory Commission’) was created in furtherance to the provisions of the Andhra Pradesh Electricity Reform Act, 1998 (hereinafter referred to as the ‘Reform Act, 1998’) enacted by the State legislature which received the assent of the President on 21st December, 1998 and became effective w.e.f. 1st February, 1999. The Commission initiated suo motu proceedings for determination of tariff applicable to the Non-Conventional Energy generation projects of Andhra Pradesh, which was to take effect from 1st April, 2004 onwards. After hearing the Non-Conventional Power Project Developers, the Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. and Transmission Corporation of Andhra Pradesh Ltd. (for short referred to as ‘NEDCAP’ and ‘APTRANSCO’ respectively), the Regulatory Commission, vide its detailed order dated 20th March, 2004, arrived at certain conclusions and fixed the energy purchase rates at base unit price of Rs. 2.25 as on 1st April,1994 and the escalation index of 5% p.a., but the escalation would be simple and not to be compounded every year. In other words, the base price as on 1st April, 2004 will be Rs.3.37 per kwh. As these projects have no variable expenses and negligible increase in maintenance cost, the tariff will be frozen for a period of five year, which however, is to be reviewed thereafter. The Regulatory Commission also issued certain instructions to restrict and regulate various operations and other aspects. It restricted the sale, procurement and distribution of electricity by the Developers to any other party except APTRANSCO. After passing of the order dated 20th March, 2004 an application for review was filed by the Developers before the Regulatory Commission. The order was clarified to some extent on this review application vide order dated 7th July, 2004. Aggrieved from both these orders the Developers filed independent appeals under Section 111(1) of the Electricity Act, 2003 collectively against the order dated 20th March, 2004 as modified by order dated 7th July, 2004. These appeals came up for hearing before the Appellate Tribunal for Electricity (for short the ‘Tribunal’) which decided all these appeals by a common order dated 2nd June, 2006. The Tribunal granted certain relief to the appellants before it, who are the respondents in the present appeals, holding that there was some element of duress in execution of the purchase price agreements. The Power Purchase Agreement (for short ‘PPA’) was a statutory document and the Regulatory Commission had no authority to interfere with the same. It could not even be altered by the Regulatory Commission. One of the most important finding recorded by the Tribunal was that the Regulatory Commission has neither the power nor jurisdiction to compel the Developers to sell the power generated by them to APTRANSCO and/or DISCOM. Feeling seriously aggrieved from the order of the Tribunal the Transmission Corporation of Andhra Pradesh Ltd. as well as Eastern Power Distribution Company of Andhra Pradesh Ltd. have come up in appeal before this Court under Section 125 of the Electricity Act, 2003. Though the controversy, in the present case, appears to be a narrow one but on examination it is clear that there are various ancillary questions, which need to be decided by the Court, prior to answering the main controversy relating to the jurisdiction and fixation of tariff by the Regulatory Commission. Arguments at great length were addressed by different learned counsel appearing for the parties. Before we notice the facts in detail or even refer to the contentions raised, it will be appropriate to refer to the issues involved in the case as the entire matter revolves around these questions and answers thereto and the relief granted. For better understanding of the same, let us refer to these questions and answers. The comparative table of the points at iss

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2010 Supreme(SC) 549

IMPORTANT POINTJurisdiction of Electricity Regulatory Commission discussed.

Cases Referred (11)

IMPORTANT POINT
Jurisdiction of Electricity Regulatory Commission discussed.