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IN THE HIGH COURT OF DELHI
Sanjeev Sachdeva, J.
KSK Mahanadi Power Company Ltd. - Appellant
Versus
Southern Power Distribution Company of Andhra Pradesh Limited - Respondent
W.P.(C) 1380 of 2021 & CM Appln. 3897 of 2021
Decided On : 09-02-2021
Court upheld the petition challenging the termination of the Power Purchase Agreement, emphasizing the maintenance of status quo until the Central Electricity Regulatory Commission resumes functionality.
Headnote:(A) Power Purchase Agreement - Jurisdiction issues related to the Central Electricity Regulatory Commission (CERC) - Corporate Insolvency Resolution Process - Authority to file petition - Petitioner filed with consent of Resolution Professional. (Paras 2-4, 6)
(B) Status quo - Court directed parties to maintain status quo regarding bank guarantee invocation and power supply pending CERC's operationalization. (Paras 14-15)
Facts of the case:
The petitioner challenges the termination notice of the Power Purchase Agreement issued by respondent, asserting authority through its Executive-Corporate Affairs in light of the ongoing Corporate Insolvency Resolution Process. The court noted issues surrounding territorial jurisdiction and the non-functionality of CERC.
Findings of Court:
The court allowed the petition while directing maintenance of status quo regarding the bank guarantee and power supply until CERC resumes operations.
Issues: Core issues included the authority of the petitioner to file, jurisdictional matters concerning CERC, and the conditions regarding the bank guarantee amidst the ongoing insolvency process.
Ratio Decidendi: The court reasoned that maintaining the status quo aligns with justice as CERC is positioned to resolve the dispute. It reserved all rights of contention on the issues of jurisdiction and merits for future consideration by CERC.
Result: Petition disposed of with a direction to maintain status quo.
| Table of Content |
|---|
| 1. petitioner challenges termination of power purchase agreement. (Para 2) |
| 2. jurisdiction and authority issues raised by the respondent. (Para 3 , 5 , 6) |
| 3. court's observations on supreme court directives and status of the cerc. (Para 4 , 7 , 10 , 11 , 12 , 13 , 14) |
| 4. status quo maintained until cerc resumes operations. (Para 15 , 16 , 17 , 18 , 19) |
| 5. petition disposed of with procedural directions. (Para 20 , 21) |
JUDGMENT
Sanjeev Sachdeva, J. The hearing was conducted through video conferencing.
2. Petitioner impugns notice dated 19.12.2020 (sic) issued by AP Discoms seeking termination of the Power Purchase Agreement (PPA for short) and further seeks a direction to respondent no. 3 to grant consent for open access to enable the petitioner to make available the power to AP Discoms in terms of the Power Purchase Agreement.
3. Learned Senior Counsel for the respondent objects to the maintainability of the present petition. It is contended that the petition has been filed by one Mr. Anand Tiwari, the Executive-Corporate Affairs of the petitioner company. It is submitted that as the petitioner company is undergoing Corporate Insolvency Resolution Process and a Resolution Professional has already been appointed, there is no authority of said Mr. Anand Tiwari to file the present petition and the petition should have been filed by the Resolution Professional.
4. An affidavit of the Resolution Professional has been filed by the petitioner, copy of which has been forwarded over e-mail of the Court Master. The Resolution Professional has stated that the petition was filed with his knowledge and with his consent by Mr. Anand Tiwari, who was authorised to do so.
5. Further, it is contended by learned counsel for the respondent that this court would not have the territorial jurisdiction to entertain the petition.
6. It is contended by learned Senior Counsel for the petitioner that the Central Electricity Regulatory Commission (CERC for short) is situated in Delhi and the Petitioner was to approach the CERC but as the CERC is not functional, petitioner has been constrained to approach this court. It is further submitted that Power Purchase Agreement was also amended with the approval of the CERC and as such part of the cause of action has accrued in Delhi. Further, it is submitted that the Supreme Court by its order dated 29.01.2021 in Civil Appeal No. 226-227 of 2021 has relegated the petitioner to the Central Commission and also directed that the Central Commission will decide the dispute before it in accordance with law including the question as to its jurisdiction.
7. The present petition has been filed solely on the ground that the Central Commission is not functional, in as much as, it does not have a Member (law). It is noticed that by order dated 20.01.2021 in CONT. CAS. (C) 429/2020 in Civil Appeal No. 14697/2015 the Supreme Court had opined that it would be in the interest of justice, if the Member (law) joins at the earliest.
8. Learned ASG was requested to ascertain from the Commission as to when the Member (law) is likely to join.
9. Learned ASG assisted by Mr. Rajesh Gogna, Standing Counsel appearing for UOI submits that Member (law) is likely to assume charge within the next two weeks, however, no fixed date has yet been finalised.
10. One of the issues arising is with regard to the invocation of the Bank Guarantee consequent to the alleged termination of the PPA.
11. On 05.02.2021, learned Senior Counsel for the respondent had stated that though respondent had issued a letter invoking the subject bank guarantee, but in view of the directions issued by the Supreme Court a communication had been issued to the Bank on 30.01.2021 deferring the invocation till 05.02.2021. On 05.02.2021, respondent had agreed to issue another letter to the Bank deferring invocation till 08.02.2021. It is an admitted position that the said position is still continuing.
12. Learned Senior Counsel for the respond
