IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO.161 OF 2018 Dated: 30^th May, 2024 Present: Hon’ble Mr. Justice Ramesh Ranganathan, Chairperson Hon’ble Smt. Seema Gupta, Technical Member (Electricity)

In the matter of:

MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED G-9, Prakashgadh, Anand Kanekar Marg, Bandra (E), Mumbai - 400051 … Appellant(s)

VERSUS

1. MAHARASHTRA ELECTRICITY REGULATORY COMMISSION, Through the Secretary Centre 1, 13^th Floor, World Trade Centre, Cuffe Parade, Mumbai – 400005. ... Respondent No.1

2. LANCO VIDARBHA THERMAL POWER LIMITED, Through the Director and Chief Operating Officer, Lanco House, Plot No.4, Software Units Layout Hitech City, Madhapur, Hyderabad – 500081 ... Respondent No.2 Counsel on record for the Appellant(s) : Udit Gupta Anup Jain Vyom Chaturvedi Prachi Gupta for App. 1 Counsel on record for the Respondent(s) : Sakya Singha Chaudhuri Avijeet Lala Astha Sharma Shreya Dubey Nameeta Singh Karan Jaiswal Aryaman Singh Ravish Kumar Aparna Tiwari Shriya Gambhir Shreevidya Nargolkar Shubham Hasija for Res. 2

JUDGMENT

(PER HON’BLE SMT. SEEMA GUPTA, TECHNICAL MEMBER)

1. The instant appeal is preferred by the Appellant challenging the common order dated 02.05.2018 (“impugned Order”) passed by the Maharashtra Electricity Regulatory Commission (Respondent No1 / MERC/ State Commission) in Case Nos. 136 of 2015 and Case No 85 of 2016. By way of the Impugned Order, Respondent No 1, MERC held that the termination of Power Purchase Agreement dated 25.09.2008 (“PPA”) by the Respondent No. 2 is valid and that the Appellant is not entitled to Liquidated Damages. The said order also directed the Appellant to return the Bank Guarantee of Rs. 51 Crores encashed by it, to Respondent No. 2 within a month as per clause 3.5.1 of the PPA.

2. The facts, in brief, which lead to filing of the instant appeal, are as follows:

The Appellant-Maharashtra State Electricity Distribution Company Limited (for short “MSEDCL”) is a company formed under Part XIII of the Electricity Act, 2003 read with the provisions of the Companies Act, 1956. Respondent No.1 is the Maharashtra Electricity Regulatory Commission (for short “Respondent No.1/MERC/State Commission”) and Respondent No.2-LancoVidharbha Thermal Power Limited is the Special Purpose Vehicle of Lanco Kondapalli Power Private Limited.

3. The Appellant in order to procure 2000 MW power under case 1 route, as per the guidelines for determination of tariff by bidding process, has issued the request for Qualification (“RFQ”) on 24.11.2006. On 03.04.2007, the Appellant issued the Request for Proposal for the selected bidders. Accordingly, Lanco Kondapalli Power Private Limited (”LKPPL”) submitted the bid and emerged as the successful bidder in the case 1 bidding process initiated for setting up of the project. Lanco Kondapalli Power Private Limited established a special purpose vehicle (“SPV”) i.e. Respondent No.2 herein (earlier known as Lanco Mahanadi Power Private Limited -“LMPPL”) to implement the project to supply 680 MW to the Appellant, after setting up the project near Raigarh in Chattisgarh.

4. On 25.09.2008, Respondent No 2 entered into a Power Purchase Agreement (“PPA”) with the Appellant for supplying 680 MW power from the project. The effective date for the purpose of the PPA was agreed as 04.09.2008 and the scheduled commercial operation date (“SCOD”) for the project under the PPA was 04.09.2012 or such other dates from time to time as specified in accordance with provisions of PPA.

5. Thereafter, with the consent of the Appellant, Respondent No.2 changed the location of the project from Chhattisgarh to Maharashtra. However, the Appellant had clarified that other terms and conditions of the PPA would remain unchanged i.e. there would be no change in the Schedule COD and tariff.

6. Article 3.1.2 of the PPA required Respondent No2 to fulfill certain specified “conditions subsequent” within 18 months from the Effective date (04.09.2008), which