1. Review petition seeking review of judgment upholding extension of SCOD under PPA – Alleged concealment of pending insolvency proceedings against the respondent developer. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 )
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2025 Supreme(Online)(APTEL) 11
APPELLATE TRIBUNAL FOR ELECTRICITY
Virender Bhat, Judicial Member
Southern Power Distribution Company of Telangana Ltd. – Appellant
Versus
Kranthi Ediffice Private Limited – Respondent
Review Petition in Appeal No. 133 of 2021
A review petition must be based on an error apparent on the face of the record; non-disclosure of pending insolvency proceedings and moratorium does not warrant review if disclosure would not change the outcome.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 14 - Moratorium - Review petition seeking review of judgement dated 24th January, 2024 dismissing appeal against order of Commission extending Scheduled Commercial Operation Date (SCOD) for 90 days - Ground that pendency of insolvency proceedings against 2nd respondent and moratorium under Section 14 IBC were not disclosed - Held, moratorium does not relate to pending appeal before Tribunal which was filed by review petitioner, not against it; disclosure would not have changed outcome; no error apparent on record, no cogent ground for review established. (Paras 13, 14, 16, 17)
(B) Power Purchase Agreement - Article 10.1.2(a) - Event of default - Bankruptcy/insolvency - For event of default, insolvency proceedings must remain uncontested for 30 days or an insolvency order must be passed - Neither condition met - Hence, no basis to terminate PPA. (Para 15)
Facts of the case:
The petitioner sought review of a judgement dismissing its appeal against the Commission's order which granted extension of SCOD by 90 days to the 2nd respondent. The review was sought on the ground that insolvency proceedings against the 2nd respondent were pending before NCLT and moratorium under Section 14 IBC was imposed, which was not disclosed to the Tribunal and which, according to the petitioner, constituted an event of default entitling termination of the PPA.
Findings of Court:
The review petition was dismissed as devoid of merit. The court held that the moratorium order did not relate to the present appeal, the disclosure would not have changed the outcome, and no event of default had occurred as the proceedings were not uncontested for 30 days nor was any insolvency order passed.
Issues: Whether non-disclosure of pendency of insolvency proceedings and moratorium under Section 14 IBC constitutes a ground for review of the judgement upholding extension of SCOD; and whether such proceedings constitute an event of default under the PPA.
Ratio Decidendi: A review can be entertained only if there is an error apparent on the face of the record. Neither the non-disclosure of pending insolvency proceedings nor the mere initiation of such proceedings without them being uncontested for 30 days or resulting in an insolvency order amounts to an error or a ground to interfere with the earlier judgement.
Result: Review petition dismissed.
Legal Category Hierarchy
- practice and procedure
- insolvency and bankruptcy code
- energy and electricity law
Table of Contents
2. Petitioner contends insolvency moratorium and non-disclosure warrant review; respondent argues no bearing on appeal's outcome. (Para 8 , 9 , 10 )
3. Review petition dismissed as devoid of merit; no cogent ground to exercise review power. (Para 17 )
4. What is the effect of a moratorium under Section 14 of IBC on the pendency of an appeal before a tribunal?
The moratorium prohibits institution or continuation of suits or proceedings against the corporate debtor, but does not relate to the appeal filed by the appellant itself, and the judgment under review did not change the status of the respondent. (Para 12 , 13 , 14 )
5. Does the failure to disclose pending insolvency proceedings before a tribunal warrant review of its judgment?
No, because even if such disclosure had been made, it would not have changed the outcome of the appeal, as the insolvency proceedings did not affect the issues decided. (Para 16 )
6. Does the initiation of insolvency proceedings against a solar power developer constitute an event of default under Article 10.1.2(a) of the PPA, entitling the discom to terminate the PPA?
No, because to constitute an event of default, the insolvency proceedings must remain uncontested for 30 days or a bankruptcy order must have been passed, which was not the case here. (Para 15 , 12 )
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. Vide this petition, the petitioner – Southern Power Distribution Company of Telangana Ltd. is seeking review of judgement dated 24th January, 2024 of this Tribunal in Appeal No. 133 of 2021 filed by the petitioner assailing therein the order dated 19th December, 2018 passed by 1st Respondent – Telangana State Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in OP No. 64 of 2018 filed by 2nd Respondent – M/s. Kranthi Ediffice Private Limited.
2. The 2nd Respondent was a successful bidder through open competitive bidding 2012 and open offer route 2013 to setup the solar photovoltaic power project of 10 MW capacity at Nagarkurnool village in Mahabubnagar Dist., Telangana State. It entered into PPA with the Appellants on 8th January, 2015 in this regard for sale of power to the Discom at a tariff of Rs.6.49 per unit. The project was to be commissioned by 7th January, 2016 and with penalties upto May, 2016. The Government of Telangana State, vide letters of 8th May, 2015 and 4th December, 2015 had extended the Scheduled Commercial Operation Date (SCOD) of the solar power project upto 31st March, 2016 on agreed tariff of Rs.6.45 per unit and further vide letter dated 26th July, 2016, the SCOD was extended upto 31st December, 2016 as a last chance for the solar power projects which had concluded PPAs under competitive bidding, 2012 and open offer route, 2013 at the same agreed price of Rs.6.45 per unit. The First Respondent, i.e. the Commission accorded approval to such extension of SCOD vide letter dated 14th October, 2016. Accordingly, a supplementary PPA dated 3rd December, 2016 came to be executed between the Appellants and the 2nd Respondent hereby extending the SCOD till 31st December, 2016 with further conditions that there shall not be any further extension of SCOD. However, on account of certain stated difficulties, that had allegedly arisen owning to the demonetization of high value currency by the Govt. of India, the 2nd Respondent could not complete the project by 31st December, 2016. It submitted a representation dated 31st December, 2016 to the Appellants seeking extension of time by 2 months to complete the project but there was no response from the Respondents. Thereafter, the 2nd Respondent approached the Hon’ble High Court of Hyderabad through Writ Petition No. 24 of 2017 which was disposed off vide order dated 3rd January, 2017 while granting liberty to the 2nd Respondent to re-submit the representation dated 31st December, 2016 within one week of the order with further direction to the Appellants to examine the same in right perspective and not to initiate any coercive steps in this behalf pending its consideration. Accordingly, the 2nd Respondent submitted a representation dated 7th January, 2017 afresh to the Appellants seeking extension of SCOD. The Appellants vide order dated 19th January, 2017, refused to extend the COD on the ground that the reasons stated therein do not attract the Force Majeure clause of the PPA.
3. Thereafter, the 2nd Respondent again approached the Hon’ble High Court of Hyderabad by way of fresh Writ Petition No. 2490 of 2017 challenging the above noted order dated 19th January, 2017 which was dismissed as withdrawn on the ground that only 1st Respondent i.e. the Commission was empowered to extend the SCOD. While granting the permission to the 2nd Respondent to withdraw the Writ Petition, the Hon’ble High Court directed the Appellants not to take coercive action for a period of three weeks within which the Commission was mandated to pass appropriate orders on the interim application filed by the 2nd Respondent.
4. Subsequently, the 2nd Respondent filed OP No. 64 of 2018 of the Commission seeking direction to M/s. Telangana Southern Power Distribution Company Ltd. to extend the SCOD of the solar power project in question beyond the time stipulated under the PPA dated 8th January, 2015 as well as the supplementary
