2025 Supreme(Online)(APTEL) 61
APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial Member
Swasti Power Engineering Ltd. Presently known as Swasti Power Private Limited – Appellant
Versus
Punjab State Electricity Regulatory Commission – Respondent
APPEAL No. 104 of 2019
Advocates:
For the Appellants/Petitioners: Sanjay Sen, S.r. Adv., B.P. Patil, S.r. Adv., Parinay Deep Shah, Shikha Ohri, Alisha Gaba
For the Respondents: Gargi Kumar, Amit Kapur, Akshat Jain, Avdesh Mandloi, Abhimanyu Maheshwari, Shikhar Verma, Rishabh Bhardwaj, Sayan Ghosh, Swapna Seshadri, Anand K. Ganesan, Amal Nair
A party is estopped from raising a jurisdictional objection for the first time in appeal before the Appellate Tribunal when it had accepted a prior binding judgment on the issue and failed to raise it before the lower forum.
Headnote:(A) Electricity Act, 2003 - Sections 79, 86 - Jurisdiction - State Electricity Regulatory Commission vs. Central Electricity Regulatory Commission - In cases involving generation in one state and supply to another, the appropriate commission is generally the Central Commission; however, the appellant is estopped from raising a jurisdictional objection for the first time in appeal when it had accepted a prior binding judgment of the Tribunal on the same issue and failed to raise the objection before the State Commission. (Paras 14-17)
(B) Contract Law - Force Majeure - Notice requirements - Power Purchase Agreement - A party claiming relief under a force majeure clause must strictly comply with the notice requirements stipulated in the contract, including the time period within which notice must be given. Failure to do so renders the claim invalid. In this case, a notice issued 27 days after the alleged force majeure event, which did not mention force majeure or comply with other contractual requirements, was held to be invalid. (Paras 29-36)
(C) Contract Law - Force Majeure - Cessation of event - Once a force majeure event ceases to exist (e.g., by a judicial order setting aside the underlying cause), the affected party cannot terminate the agreement based on the same event and must instead notify the other party of the cessation. (Paras 37-40)
(D) Electricity Act, 2003 - Powers of State Commission - Void ab initio - Natural Justice - A State Commission lacks the jurisdiction to declare a power purchase agreement between a generator and a distribution licensee of another state as void ab initio. Such an order cannot be passed without impleading the affected party (the other state's distribution licensee) as a respondent, as it violates the principle of natural justice (audi alteram partem). (Paras 42-45) (E) Contract Law - Specific Performance - Remedy - Relief of specific performance of a contract is discretionary and should not be granted when the affected party can be adequately compensated by monetary damages. (Para 46)
Facts of the case:
The appellant, a power generator with a project in Uttarakhand, entered into a Power Purchase Agreement (PPA) with PTC India Limited (PTC), a trader, in 2005. PTC then entered into a Power Sale Agreement (PSA) with PSPCL, a distribution licensee in Punjab. In 2009, the Uttarakhand Commission passed an order restricting the sale of electricity outside the state to a trader or distribution licensee. The appellant, without giving proper force majeure notice, signed a new PPA with UPCL (the Uttarakhand distribution licensee). This Tribunal later set aside the Uttarakhand Commission's order in 2011, directing the appellant to apply for open access. Instead of doing so, the appellant terminated the original PPA in 2011. PTC filed a petition before the Punjab Commission, which declared the termination invalid, the PPA with UPCL void ab initio, and directed specific performance by the appellant.
Findings of Court:
The Tribunal affirmed the finding that the termination notice was invalid due to non-compliance with the force majeure notice requirements and because the force majeure event had ceased. However, the Tribunal set aside the order declaring the PPA with UPCL void ab initio and the direction for specific performance, holding that the Punjab Commission lacked the jurisdiction and power to issue such orders.
Issues: The main issues were whether the Punjab Commission had jurisdiction; whether the termination of the PPA was valid; whether the Commission could declare the UPCL PPA void ab initio; and whether a direction for specific performance was proper.
Ratio Decidendi: The Tribunal held that a party cannot raise a new jurisdictional objection in appeal that it failed to raise at the first instance before the lower forum, especially after accepting a final judgment on the same point. A claim of force majeure fails if the contractual notice procedures are not strictly followed. A State Commission's powers do not extend to voiding a PPA of another state without hearing the affected party. Specific performance is not the appropriate remedy when monetary compensation is adequate. Result : Appeal partly allowed. The impugned order is set aside in so far as it declared the PPA between the appellant and UPCL void ab initio and directed the appellant to specifically perform its obligations under the PPA with PTC. The finding that the termination notice was invalid is affirmed. (Paras 47-48)
JUDGMENT
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. The Appellant – M/s Swasti Power Engineering Ltd. is aggrieved by the order dated 15th January, 2019 passed by 1st Respondent Punjab State Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in Petition N. 55 of 2017 filed by 2nd Respondent – PTC India Limited (in short “PTC”) thereby:-
(a) Declaring the letter dated 9th March, 2011 issued by Appellant for termination of power purchase agreement (PPA) dated 24th August, 2005 executed between the Appellant and PTC as invalid;
(b) Declaring the PPA dated 3rd July, 2009 executed between the Appellant and Uttarakhand Power Corporation Limited (UPCL) as vide ab initio;
(c) Directing Appellant to specifically perform its obligations under the PPA dated 24th August, 2005 executed with PTC.
2. The Appellant has assailed these declarations/directions of the Commission in this appeal.
3. The Appellant, a company incorporated under the provisions of Companies Act, 1956 is a power generator and has developed, implemented and commissioned 3x7.5 MW (22.5 MW) Bhilangana Hydro Project in the State of Uttarakhand.
4. The 2nd Respondent – PTC is a licensed entity to undertake inter- state trading of electricity. The 3rd Respondent – Punjab State Power Corporation Limited (in short PSPCL) is a deemed licensee operating in the State of Punjab.
5. The facts and circumstances in which this appeal has arisen would be limpid in the below given list of relevant date and events; would be limpid in the below given list of relevant date and events; would be limpid in the below given list of relevant date and events; would be limpid in the below given list of relevant date and events;
6. The above noted petition No. 55 of 2017 filed by the 2nd Respondent – PTC has been disposed off by the Commission vide the impugned order dated 15th January, 2019. Thus, the power generator M/s Swasti Power Engineering Limited is in appeal before us against the said order.
7. We have heard Learned Senior Counsel appearing on behalf of the Appellant and Learned Counsels for Respondents. We have also gone through the Written Submissions filed by the Learned Counsels. From perusal of the written submissions of the parties and upon hearing the Learned Counsels, following issues arise for our determination in this appeal :-
a) Whether the Commission i.e. Punjab Electricity Regulatory Commission had jurisdiction to entertain the petition filed by PTC;
b) Whether the letter dated 9th March, issued by the Appellant for termination of PPA dated 24th August, 2005 executed by it with PTC is legally valid;
c) Whether the Commission was competent to declare the PPA dated 3rd July, 2009 executed between the Appellant and UPCL as vide ab initio;
d) Whether the Commission’s direction to Appellant to specifically perform its obligations under the PPA dated 24th August, 2005 executed with PTC is legally tenable.
Our Analysis
a) Whether the Commission i.e. Punjab Electricity Regulatory Commission had jurisdiction to entertain the petition filed by PTC;
8. We may note that PTC had initially approached the Commission i.e. Punjab Electricity Regulatory Commission by way of Petition No. 30 of 2013 seeking declaration that termination notice dated 9th March, 2011 issued by Appellant is illegal. The said petition was dismissed by the Commission vide order dated 2nd September, 2013 holding that the Commission does not have jurisdiction over the disputes and cannot direct Appellant to implement the directions issued by this Tribunal in judgement dated 11th January, 2011 passed in Appeal Nos. 88 of 2010 and 93 of 2010 and that it cannot direct the Distribution Licensee of the State of Uttarakhand i.e. UPCL not to insist upon the Appellant to entire into a PPA for supply of power from its power project. Accordingly, the Commission held the petition to be not maintainable and directing the PTC to approach the right forum.
9. Subsequently, the PTC approached Uttarakhand Commission by w
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