Advocates appeared:
For the Appellant(s) : Mr. Dhruv Mehta, Sr. Adv. Ms. Garima Jain, AOR Ms. Sumana Naganad, Adv. Mr. Tushar Kanti Mohindroo, Adv. Mr. Arnav Khanna, Adv. Mr. Kartikeya Sharma, Adv. Mr. Mohit Singh, Adv. Ms. Nidhi Gupta, Adv. Ms. Vismaya Simha, Adv.
For the Respondent(s): Mr. Snehasish Mukherjee, AOR

Based on the provided legal document, here are the key points regarding the case of Chamundeshwari Electricity Supply Company Ltd. (CESC) – Appellants vs. Saisudhir Energy (Chitradurga) Pvt. Ltd. & Anr. – Respondents:

Case Overview and Parties * The case involves a dispute over a Power Purchase Agreement (PPA) for a 10 MW solar power project in Chitradurga District, Karnataka, between the distribution licensee (Appellant) and the private developer (Respondent No. 1). (!) (!) * The Appellant, CESC, is a state-owned distribution licensee, while Respondent No. 2 is the state transmission utility (KPTCL). (!) * The Respondent No. 1 was selected through a competitive bidding process under the State's solar policy. (!)

Contractual Framework and Obligations * The PPA executed on 30.08.2012 and a supplementary PPA on 28.05.2013 stipulated that the Commercial Operation Date (COD) must be achieved within 12 months, preceded by the satisfaction of "Conditions Precedent" (CPs) within 240 days. (!) (!) * The CPs required the Developer to secure land, approvals, financial closure, and obtain power evacuation approval from KPTCL. (!) * Article 4 of the PPA outlines the Conditions Precedent, while Article 5 details the Developer's substantive obligations, including constructing the project and connecting it to the grid. (!) (!) * Article 4.4 allows the Appellant to encash the Performance Security if the Developer fails to commence supply by the Scheduled COD, subject to specific contractual reliefs. (!) * Article 5.7 provides for extensions of time only if delays are attributable to the Appellant (CESC) or Force Majeure events, requiring a formal request. (!) (!) * Article 14.5 mandates that any party claiming Force Majeure must issue a written notice within 7 days, including particulars of the event and remedial measures; this is a condition precedent for claiming relief. (!)

Facts of the Dispute * The project could not achieve COD because the required 220 kV evacuation lines by KPTCL were not commissioned until August 2015, well beyond the contractual timeline. (!) (!) * The Developer sought assistance for extensions but faced a demand from the Appellant for a reduced tariff, leading the Developer to approach the State Commission. (!) * The Appellant invoked and encashed the Performance Bank Guarantee (Rs. 24.9 crores) on 12.11.2014 due to the failure to meet CPs and COD. (!) (!) * The State Commission, via an interim order on 14.11.2014, restrained the Appellant from encashing the guarantee, and subsequently ordered its restoration, timeline extension, and tariff renegotiation. (!) (!)

Arguments Presented * Appellant's Argument: The PPA is a binding commercial contract where risk is allocated strictly by its terms. The Developer failed to seek an extension under Article 5.7 or issue a Force Majeure notice under Article 14.5. Therefore, the encashment under Article 4.4 was lawful. Regulatory bodies cannot alter these contractual terms. (!) (!) (!) (!) * Respondent's Argument: The delay was caused by KPTCL (a state agency), which should be treated as an event attributable to the Appellant under Article 5.7. The lack of a formal notice should not negate the substantive reality of the delay. The regulatory body had the power to intervene to prevent unjust enrichment and ensure renewable energy goals. (!) (!) (!) (!)

Court's Findings and Analysis * The Court held that the contractual framework does not operate on "automaticity"; relief for delays must be actively sought under the specific provisions of the contract (Article 5.7 or Article 14.5). (!) * Since the Developer did not obtain an extension under Article 5.7 or issue a notice under Article 14.5, the timelines remained binding, and the preconditions for invoking Article 4.4 were satisfied. (!) * The Court rejected the argument that the delay by KPTCL constituted a Force Majeure event under Article 14.3.1, noting that the specific definition of Force Majeure in the PPA did not include delays in evacuation readiness attributable to the transmission utility. (!) * The Court clarified that while the PPA involves uncertain events, it provides specific mechanisms for relief which were not utilized by the Developer. Thus, it does not function as a "contingent contract" in the legal sense that would exempt the Developer from liability without following the contract's remedy clauses. (!) * The Court emphasized that explicit terms of the contract are the final word on party intention and that regulatory bodies cannot rewrite the contractual framework or superimpose obligations alien to the agreement. (!)

Conclusion and Judgment * The Court ruled that the Appellant's invocation of the performance security was in full conformity with the PPA. (!) * The directions of the State Commission and APTEL to restore the guarantee, extend timelines, and renegotiate the tariff were found to transgress the limits of their jurisdiction by overriding the contractual allocation of risk. (!) * The appeal was allowed, and the judgments of the APTEL and State Commission were set aside. (!)