(Ranjan Gogoi and Abhay Manohar Sapre, JJ.)
Gujarat Urja Vikas Nigam Ltd. ________________________ Appellant
v.
M/s. Acme Solar Technologies (Gujarat) Pvt. Ltd. & Ors. ______________________________________________ Respondent(s)
Civil Appeal Nos. 5978-5979 of 2014, decided on November 9, 2016
The Order of the court was delivered by
Order
1. The liability of the first respondent to pay liquidated damages under the PPA by and between the appellant and the first respondent has been determined by the Gujarat Electricity Regulatory Commission, Ahmedabad (hereinafter referred to as “the State Commission” and the Appellate Tribunal for Electricity (hereinafter referred to as “the Appellate Tribunal”) to be from 29th May, 2011 (Schedule Commercial Operation Date) to 30th September, 2011. Aggrieved, the present appeals have been filed.
2. The above recital would sufficiently indicate that the liability of the first respondent to pay liquidated damages is not in dispute. The only question is one of the period of time during which this liability would run. The appellant contends that the said liability should be upto 13th March, 2012 which is the date certified by Gujarat Energy Development Agency (“GEDA” for short) to be the date of actual commissioning of the solar/power plant set up by the first respondent.
3. To effectively answer the question which has arisen, as identified above, it will be necessary to notice a few provisions of the Power Purchase Agreement (for short “PPA”) dated 31st May, 2010 executed by and between the parties. The relevant clauses thereof which are self-explanatory may thus be extracted below:
“ARTICLE 1
DEFINITIONS
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“Commercial Operation Date” with respect to the Project shall mean the date on which the Solar Photovoltaic Grid Interactive power plant is available for commercial operation (certified by GEDA) and such date as specified in a written notice given at least ten days in advance by the Power Producer to GUVNL.
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“Scheduled COD” or “Scheduled Commercial Operation Date” means 29th May, 2011.
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ARTICLE 2
LICENCES, PERMITS & CONDITIONS PRECEDENT
2.1 . . . . . . . . .
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2.3 Power Producer will be allowed to migrate to Government of India’s Jawaharlal Nehru National Solar Mission (JNNSM). However, if Government of India/its agency(ies) do not allow the migration to its Jawaharlal Nehru National Solar Mission, Power Producer shall have to ensure commencement of supply of power on scheduled commercial operation date (COD) as per the terms and conditions of this agreement. In case Power Producer fails to commence the supply of power on scheduled COD, it shall be liable to pay to GUVNL liquidated damage as per Article 4.
ARTICLE 3
CONSTRUCTION AND OPERATION
4.1 Obligations of the Power Producer:
(i) The Power Producer shall obtain all statutory approvals, clearances and permits necessary for the Project at his cost in addition to these Approvals as listed in Schedule 3.
(ii) The Power Producer shall construct, operate and maintain the Project during the term of PPA at his cost and risk including the interconnection facilities.
(iii) The Power Producer shall sell all available capacity from identified Solar Photovoltaic Grid Interactive Power Plants to the extent of contracted capacity on first priority basis to GUVNL and not to sell to any third party.
(iv) The Power Producer shall seek approval of GETCO in respect of interconnection Facilties.
(v) The Power Producer shall approach GETCO for laying transmission line from it switchyard to nearest substation of GETCO. Further, Power Producer shall ensure the injection of power at not lower than 66 KV level. Power Producer shall also install RTUs to enable SLDC to monitor the injection of power.
(vi) The Power Producer shall undertake at its own cost maintenance of the Interconnection Facilities as per the specifications and requirements of GETCO, as notified to the Power Producer, in accordance with Prudent Utility Practices.
(vii) The Power Producer shall operate and maintain the Project in accordance with Prudent Utility Practices. Further, power producer shall submit forecast for availability of power to SLDC as per Regulation of Hon’ble GERC/CERC.
(viii) The Power Producer shall be responsible for all payments on account of any taxes, cesses, duties or levies imposed by the GoG or its competent statutory authority on the land, equipment, material or works of the Project or on the Electricity generated or consumed by the Project or by itself or on the income or assets owned by it.
(ix) To procure start up power required for the plant from respective Discom.
(x) Power Producer shall continue to hold at least 51% of equity from the date of signing of this agreement upto a period of 2 years after achieving commercial operation date of project and 26% of equity for a period of 3 years thereafter.
(xi) Fulfilling all other obligations undertaken by him under this Agreement.
(xii) The Power Producer shall ensure that no fossil fuel viz. Coal gas lignite naphtha wood etc. shall be used except during barring gear operation.
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4.3 Liquidated damages for delay in commissioning the Project/Solar Photovoltaic Grid Interactive Power Plant beyond Scheduled Commercial Operation date.
If the payment is not commissioned by its Scheduled Commercial Operation Date other than the reasons mentioned below, the Power Producer shall pay to the GUVNL liquidated damages for delay at the rate of Rs. 10000 per day per MW for delay of first 60 days and Rs. 15000 per day per MW thereafter. Liquidated damage is payable upto delay period of 1 year from Scheduled Commercial Operate Date. If the Power Producer fails to make payment of the liquidated damages for a period exceeding 30 days, GUVNL shall be entitled to invoke the Bank Guarantee to recover the liquidated damages amount. In case of delay more than 1 year, GUVNL assumes no obligation and has right to terminate the Power Purchase Agreement by giving 1 month Termination notice.
1. The project cannot be Commissioned by Scheduled Commercial Operation Date because of Force Majeure event: or
2. The Power Producer is prevented from performing its obligations because of material default on part of GUVNL.
3. Power Producer is unable to achieve commercial operation on scheduled commercial Operation Date because of delay in transmission facilities/evacuation system for reasons solely attributable to the GETCO.
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SCHEDULE 3
APPROVALS
1. Consent from the GETCO for the evacuation scheme for evacuation of the power generated by the 15 MW Solar Photovoltaic Grid Interactive Power Projects.
2. Approval of the Electrical Inspectorate, Government of Gujarat for commissioning of the transmission line and the Solar Photovoltaic Grid Interactive Power converters installed at the Project Site.
3. Certificate of Commissioning of the solar Photovoltaic Grid Interactive Power Project issued by GEDA.
4. Permission from all other statutory and non-statutory bodies required for the Project.
5. Clearance from the Airport Authority of India, if required.
6. Clearance from the Department of Forest, Ecology and Environment, if required.”
4. It will also be necessary to note, at this stage, another fact which would have relevance to the issue in controversy. The respondent no. 1 despite signing the PPA dated 31st May, 2010 entered into a Supplemental Power Purchase Agreement (“Supplemental PPA” for short) dated 24th March, 2011 with regard to change of the site. Clause 2.3 of the Supplemental PPA dated 24th March, 2011, which is relevant, is extracted
“2.3 As per the PPA dated 31st May, 2010, Scheduled Commercial Operation Date of Solar Power Project is 29th May, 2011. Since M/s. ASTGPL has changed the location of the Solar Power Project after lapse of significant time, non-availability of Transmission system shall not be considered as a ground for non-levy of Liquidated Damages. M/s. ASTGPL shall pay Liquidated Damages even in case of non-availability of transmission system for evacuation of power by Schedule Commercial Operation Date.”
5. Therefore, in terms of the Supplemental PPA dated 24th March, 2011 the first respondent had agreed to pay liquidated damages “even in case of non-availability of transmission system for evacuation of power by Schedule Commercial Operation Date”.
6. A reading of the impugned judgment of the State Commission and the Appellate Tribunal would seem to indicate that based on certain letters by the first respondent a finding was recorded that Gujarat Energy Transmission Corporation Limited (“GETCO” for short) which was responsible for below: providing transmission lines at the new site had failed to do so within four months of the award of the work of construction under the Supplemental PPA dated 24th March, 2011 (June 2011) and, therefore, the liability of the respondent to pay the liquidated damages should be limited to 30th September, 2011.
7. Insofar as clause 2.3 of the Supplemental PPA dated 24th March, 2011 is concerned, the findings of the forums below appear to be that in the circumstances of the case, the first respondent had no option but to sign the Supplemental PPA containing the aforesaid clause. Accordingly, the impugned findings with regard to the extent of liability have been arrived at.
8. We have taken note of the elaborate arguments advanced on behalf of the rival parties. When the parties were bound by the terms and conditions of the PPA dated 31st May, 2010 and Supplemental PPA dated 24th March, 2011 we do not think that it was proper on the part of either the State Commission or the Appellate Tribunal to travel beyond the said terms and conditions to determine the liability of the first respondent to pay liquidated damages or the period thereof. However, in this regard, we have taken note of the communication/certificate issued by the Office of the Chief Electrical Inspector dated 31st December, 2011 (a mandatory requirement under Clause 3 Schedule 2 extracted above) to the first respondent which goes on to recite that upon inspection of the Electrical installation and associated equipments at Switchyard of the first respondent at the new site, permission is granted to energize the above electrical installations along with associated equipments. This would indicate that the Switchyard of the first respondent was ready for being energized on 31st December, 2011.
9. Regard must also be had to the certificate of commissioning issued by GEDA which is another mandatory requirement in terms of the terms and conditions of PPA dated 31st May, 2010. In the said certificate, though the date of commissioning is mentioned as 13th March, 2012, it has also been certified that the plant was ready for generation on 31st December, 2011 but for the 66 KV transmission line. Reading the aforesaid two certificates/communications issued by the office of the Chief Electrical Inspector and GEDA it will be abundantly clear that the Switchyard and the electrical installations required to be set up by the respondent no. 1 were ready for commissioning on 31st December, 2011 though the actual commissioning thereof had to await the completion of the transmission lines which was made available by GETCO and accordingly were charged on 13th March, 2012. Having regard to the totality of the aforesaid facts we are of the view that in the facts of the present case (notwithstanding clause 2.3 of the Supplemental PPA dated 24th March, 2011) it would be just and proper to hold that the respondent no. 1 is liable to pay liquidated damages to the appellant from 29th May, 2011 to 31 December, 2011. The order of the Appellate Tribunal upholding the order of the State Commission, accordingly, stands modified in terms of the present order. Necessary adjustment between the parties will be carried out forthwith.
10. The appeals are allowed in the above terms and to the extent indicated.
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