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2026 Supreme(Online)(APTEL) 59
APPELLATE TRIBUNAL FOR ELECTRICITY
Seema Gupta, Technical Member, Virender Bhat, Judicial Member
Jk Minerals – Appellant
Versus
Madhya Pradesh Electricity Regulatory Commission – Respondent
APL No. 375 OF 2019
For the Appellants/Petitioners: Parinay Deep Shah, Ritika Singhal, Surabhi Pandey
For the Respondents: C.K. Rai, Vignesh Adithiya S, Ganesan Umapathy, Pavitra Balakrishna, Vaishnavi Viswanathan
Under the doctrine of quasi-contracts and unjust enrichment, energy generators are entitled to compensation for power injected into the grid if a distribution utility has benefited from said energy, notwithstanding the absence of a formal agreement, particularly when access was denied due to erroneous regulatory findings.
Headnote:(A) Electricity Act, 2003 - Open Access - Denial of access - Compensation for energy injection - Generators injecting power into the grid without a formal agreement or valid open access, though with an awareness of potential revenue, are entitled to compensation under the principle of quasi-contracts and the doctrine of unjust enrichment to prevent a utility from profiting at the generator's expense. (Paras 35, 36)
(B) Restitution - Maxim actus curiae neminem gravabit - When a party is deprived of its legal entitlements due to an erroneous order of a court or commission, restitution through compensation and carrying cost is a necessary corollary to rectify the wrong and prevent unjust enrichment. (Paras 39, 40, 44, 45)
Facts of the case:
An energy generator sought long-term open access for third-party supply, which was initially denied by the regulatory body. While the matter was litigated, the generator continued to inject power into the grid, acting under the expectation of eventual approval. Following a remand, access was finally granted. The generator claimed compensation for the period between the initial wrongful rejection and the eventual grant of access, arguing that the utilitiy was unjustly enriched by the free consumption of injected power.
Findings of Court:
The court found that although the generator agreed to inject power temporarily, the utility's wrongful denial of open access led to an inequitable situation. Relying on the doctrine of quasi-contracts, the court held that the utility cannot benefit from its own wrong, and the generator is entitled to remuneration at the applicable power purchase cost rates for the period after the initial erroneous order.
Issues: Whether a generator is entitled to compensation for power injected into the grid in the absence of a long-term open access agreement, and whether carrying cost is applicable as restitution for legal delay.
Ratio Decidendi: Electricity distribution entities cannot consume and benefit from power injected by generators while simultaneously denying compensation based on technicalities or lack of formal agreements, especially when the initial denial of access was determined to be erroneous. Compensation and interest (carrying costs) are required as a matter of restitution to negate the effects of a court's or regulator's prior error.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. legal dispute over ltoa denial and compensation claims. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. appellant's arguments regarding wrongful ltoa denial and compensation. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 3. respondents' defense regarding waiver and estoppel of claims. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25) |
| 4. review of procedural history and initial ltoa feasibility. (Para 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 5. application of quasi-contract and restitution principles for compensation. (Para 35 , 36 , 37 , 38 , 39 , 40) |
| 6. determination of carrying costs and interest on restitution amounts. (Para 41 , 42 , 43 , 44 , 45 , 46 , 47) |
JUDGMENT
(PER HON’BLE MRS. SEEMA GUPTA, TECHNICAL MEMBER, ELECTRICITY)
1. The captioned appeal has been filed by the Appellant-JK Minerals assailing the Order dated 16.08.2019 passed by the Madhya Pradesh Electricity Regulatory Commission in Petition No. 22 of 2017 (“Impugned Order”). The facts, in brief, which lead to filing of the instant appeal, are as follows:
2. The Appellant- JK Minerals is a renewable energy generator having a 1 MW Solar Power Plant ("Solar Plant") installed at village Ranthbawar, district Shajapur. The Appellant is connected on dedicated 33kV Ujjas (M&B) Feeder and Developer.
3. Respondent No. 1 is Madhya Pradesh Electricity Regulatory Commission (hereinafter referred as State Commission / MPERC) and Respondent No. 2 is the MP Power Transmission Company Ltd. (hereinafter referred as Respondent No. 2/MPPTCL) undertaking the activities relating to inter-State transmission of electricity for and on behalf of erstwhile MPSEB. Respondent No 3 is M.P Paschim Kshetra Vidyut Vitran Company Ltd, (hereinafter referred as Respondent No. 3/MPPKSVCL), Respondent No. 4 is M/s Indore Treasure Island Pvt. Ltd. ("Treasure Islands") situated in Indore and was desirous of sourcing solar power through Open Access from the Appellant – JK Minerals.
4. On 19.07.2016, a Power Purchase Agreement (PPA) was signed between the Appellant and the 4th Respondent- M/s Treasure Island, and Appellant, vide application dated 20.07.2016, applied to Respondent No. 2-MPPTCL, seeking permission to avail Long-Term Open Access (LTOA) under the provisions of the Open Access Regulations, 2005, for third-party sale of 100% of the power generated from its Solar Plant to M/s Treasure Islands, having a contracted demand of 2200 KVA, which was denied vide letter dated 22.08.2016.
5. The Appellant, vide its letter dated 02.09.2016, informed Respondent No. 2-MPPCL that Respondent No 4- Treasure Islands had not applied for any enhancement of contract demand, consumption, or feeder load, and would consume power strictly within its existing contracted demand and requested for grant of LTOA. It has been submitted that Respondent No 4 - Treasure Islands had also, confirmed that no additional contract demand or load had been sought and consumption would remain within existing limits.
6. Thereafter, Respondent No. 2- MPPCL vide its letter dated 08.09.2016, requested the Director (Commercial), MPPKSVCL – Respondent No 3 to reconsider technical feasibility to comply with statutory and regulatory requirements of providing non-discriminatory Open Access to the Appellant. Meanwhile, the Appellant commissioned its Solar Plant on 20.09.2016 and, being a solar generating station, started injecting power into the grid. Respondent No 3 vide its letter dated 01.10.2016, rejected the Respondent No. 2’s request and Respondent No. 2-MPPCL, vide its letter dated 15.10.2016 rejected the Appellant’s application seeking LTOA for third-party sale of 100% power. Appellant vide its letter dated 27.10.2016 to the Secretary MPERC, sought review of denial of LTOA under Regulation 8.35 of MPERC Regulation 2006 and again requested for intervention on 07.11.2016. Secretary, MPERC vide its letter dated 12.01.2017 advised that the dispute between the Generating Company and Licensee be pursued before the State Commission in
