IN THE APPELLATE TRIBUNAL FOR ELECTRICITY NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 271 OF 2019 Dated: 28^th January 2021 Present: Hon’ble Mr. Ravindra Kumar Verma, Technical Member Hon’ble Mr. Justice R.K. Gauba, Judicial Member In the matter of:

Haryana Power Purchase Centre Sector 6, Shakti Bhawan, Panchkula – 134 109 Haryana …. Appellant Versus

1. Haryana Electricity Regulatory Commission Through its Secretary Bays No. 33-36, Sector 4 Panchkula – 134 112 Haryana

2. IA Hydro Energy Private Ltd Through its Managing Director D-17, Sector-1, New Shimla, Shimla – 171 009 Himachal Pradesh … Respondents Counsel for the Appellant (s): Mr. M.G. Ramachandran, Sr. Adv Ms. Ranjitha Ramachandran Ms. Poorva Saigal Mr. Shubham Arya Counsel for the Respondent (s): Mr. Sandeep Kumar Mohapatra for R-1 Mr. Sanjay Sen, Sr. Adv. Mr. Ashish Anand Bernard Ms. Ruth Elwin Ms. Mandakini Ghosh Mr. Paramhans Sahani for R-2

J U D G M E N T

PER HON'BLE MR. JUSTICE R.K. GAUBA, JUDICIAL MEMBER

1. The matter was taken up for final hearing by video conference, physical presence being not desirable in view of advisories issued by governmental authorities due to pandemic conditions prevailing on account of spread of corona virus (Covid-19).

2. The appellant Haryana Power Purchase Centre (hereinafter referred to as “HPPC” or “the appellant) is the designated nodal agency dealing with the procurement of power from generating companies and others on behalf of the two distribution licensees (Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited) in the State of Haryana. The second respondent, IA Hydro Energy Private Limited (for short “IA Energy”) is a generating company which has established a 36 MW Hydro Power Project at Chanju (“Hydro Project”) in the State of Himachal Pradesh, the project having been allocated to it through MoU route Implementation Agreement dated 12.06.2009 by Himachal Pradesh, the commercial operation whereof commenced on

23.02.2017.

3. The appeal is directed against the Order dated 08.03.2019 passed by the first respondent Haryana Electricity Regulatory Commission (hereinafter referred to as “the State Commission” or “the Commission” or “HERC”) in Case No. HERC/PRO-15 of 2016 (hereinafter referred to “the impugned Order”) whereby the State Commission considered the Power Purchase Agreement (hereinafter referred to as “the PPA”) initialled by the appellant HPPC (also referred to as “the procurer”) and the second respondent, IA Energy (also referred to as “the generator”), directing that two stipulations - clause 3.3.2 providing for an exit option and clause 1.1 dealing with wheeling charges - be modified in terms of para 6(a) and para 6(b), the effect of the directions being that the exit option is to be done away with and the capping of wheeling charges is to be removed while retaining capping for wheeling losses. The prime contention of the appellant is that the Commission has exceeded its jurisdiction by issuing the impugned directions which have the effect of violating the freedom of contract available to the parties.

THE FACTUAL MATRIX

4. The appellant (procurer) admits that the second respondent (generator/seller) had earlier approached the distribution licensee (CSPDCL) in State of Chhattisgarh, it having submitted proposal for sale of Power from the Hydro Project to said Discom (CSPDCL) based on which CSPDCL had filed a petition, no. 39 of 2017 (M), before the Chhattisgarh State Electricity Regulatory Commission (CSERC) for approval of Power Purchase Agreement (PPA), after achieving COD (26.07.2017), the injection of power by the seller into CSPDCL grid having begun with effect from 08.07.2017.

5. It is undisputed that the procurer and generator had engaged each other in negotiations around the same period as above for procurement / sale of electricity from the Hydro Project and the parties finalised the terms and conditions, and the PPA, subject to approval by the State Commission for such procurement, the