The jurisdiction of CERC is limited to matters covered by clauses (a) to (k) of Sub-Section 1 of Section 79 of the Electricity Act, 2003.

JUDGMENT

V. Kameswar Rao, J.

I.A. 7249/2022

1. This application has been filed under Order VII Rule 11 of the Code of Civil Procedure, 1908 (`CPC', for short) by the applicant PTC India Limited, who is the defendant No. 2 in the titled suit, seeking rejection of the suit on the ground that the disputes therein are covered under the Electricity Act, 2003 (`Electricity Act', hereinafter), and as such need to be adjudicated by the appropriate Electricity Regulatory Commission under the aegis of the said Act.

2. At the outset, I may provide a brief background of the factual matrix leading to the institution of the suit and the instant application. The plaintiff in the suit, MB Power (Madhya Pradesh) Limited, a company incorporated under the Companies Act, 1956 and a `generating company' within the meaning of Section 2 (28) of the Electricity Act, has developed and operates a 1200 MW (2 x 600 MW) coal-based thermal power project (`Project' hereinafter) in Anuppur district in the state of Madhya Pradesh. The defendant No. 1 is a public sector bank, defendant No. 2/applicant (hereinafter referred to as `applicant') is an Electricity Trading Licensee as per the provisions of the Electricity Act, and defendant No. 3 is an Electricity Distribution Licensee in the state of Tamil Nadu.

3. On October 22, 2021, the applicant entered into a Power Supply Agreement (`PSA', for short), with the defendant No. 3 and on October 28, 2021, entered into a back to back Power Purchase Agreement (`PPA', for short) with the plaintiff. In terms of the PPA, the defendant No. 1 issued a Performance Security in the form of a Bank Guarantee bearing No. 1895621BG0000004 (hereinafter referred to as `Performance Security' and `Bank Guarantee' interchangeably) dated November 02, 2021 for an amount of Rs.15 crore on behalf of the plaintiff and in favour of the applicant. It is the case of the plaintiff in the suit that the applicant has been unlawfully withholding the Bank Guarantee after the lapse of the PPA dated October 28, 2021, and has filed the suit for declaration, mandatory and permanent injunction against the defendants from invoking the Bank Guarantee.

4. As per the PPA, certain conditions were to be fulfilled by the plaintiff and the applicant. One of the conditions to be fulfilled by the applicant was to issue a Letter of Credit in accordance with clause 12.1 of the PPA, substantially in the form specified in Schedule C of the PPA. The applicant provided the Letter of Credit in terms of the PPA and some objections were raised by the plaintiff regarding some terms therein and sought amendment to the Letter of Credit. The applicant amended the Letter of Credit and communicated the same to the plaintiff. Despite reminders, no response was received from the plaintiff. Finally on April 21, 2022, the defendant No.3 communicated to the plaintiff and the applicant that they have amended the Letter of Credit as requested by the plaintiff. The amended Letter of Credit was in line with the Letter of Credit opened in respect of other suppliers. However, subsequently, the applicant on April 22, 2022 received a letter dated April 19, 2022 from the plaintiff informing deemed termination of the PPA in terms of Article 4.4 therein. It is stated that the purported letter dated April 19, 2022, which was delivered to the applicant only on April 22, 2022, i.e., after the communication regarding amended Letter of Credit was received by the plaintiff, was issued with a view to avoid the supply of power at Rs.3.26/- per unit as the prevailing rate of power at power exchanges were much higher.

5. It is the contention of Mr. Ravi Kishore, learned counsel for the applicant that the suit is liable to rejected under Order VII Rule 11 of the CPC, as the suit is barred by law. He has stated that the Bank Guarantee in question is in furtherance of the PPA between the plaintiff and the applicant, as it was furnished by the plaintiff for the performance of its obligation under the P