Supreme Court: In an appeal filed by Solar Energy Corporation of India Limited (‘SECI’) against the judgment and order passed by the Appellate Tribunal for Electricity, wherein the Tribunal allowed the appeal preferred by Wind Four Renergy Private Limited (‘WFRPL’) and directed that the period of 132 days, for which delay was to be condoned, would commence from the date of the impugned judgment, that is, 11-01-2022, the division bench of Sanjiv Khanna and Dipankar Datta, JJ. while setting aside the impugned judgment and restoring the order passed by the CERC, reinforced the importance of adhering to project timelines in the renewable energy sector, and held that the objective and purpose of timelines is to ensure early supply of green energy and reduction of carbon footprint. Further, it directed that SECI is entitled to recover the bank guarantee amount of Rs.10 crores along with simple interest at 12% per annum, to be paid within 6 months.
Background:
WFRPL and Power Trading Company India Limited (‘PTC’) had entered five Power Purchase Agreements dated 21-07-2017. Vide each of the said PPA, WFRPL had agreed to establish a 50 MW wind power unit and generate to supply renewable (wind) power to PTC. SECI is the implementing agency for the project, being the nodal agency of the Central Government to promote renewable energy such as solar, wind etc. The Scheduled Commercial Operation date commissioning was 04-10-2018, 18 months from the date of the Letter of Award dated 05-04-2017. Further, WFRPL was entitled to an additional time with liquidated damages and reduction in tariff of upto 9 months, that is till 05-07-2019. The commissioning deadline or maximum period allowed for commissioning was 27 months from the date of LoA. Thus, the maximum period allowed for commissioning was till 05-07-2019.
The inter-state transmission licensee — Power Grid Corporation of India Limited was unable to operationalise the Long-Term Access(‘LTA’), which was required and necessary to implement and comply with the PPAs. The LTA was subsequently operationalised on 14-04-2019.
In terms of the letter dated 22-10-2019 issued by the Ministry of New & Renewable Energy, Government of India granted certain concessions and extension of milestones in wind power projects. As per Clause 2(c) of the said letter, the wind power projects shall be granted extension in scheduled commissioning of the project for a period equal to 60 days, after operationalisation of LTA. This is the additional time to be provided to the generator/developer to complete the commissioning activities after the inter-state transmission system is ready.
WFRPL had approached the Central Electricity Regulatory Commission with the assertion that they were not informed about the commissioning of the LTA by the appellant till 22-11-2019. Not being aware as to the date of operationalisation of the LTA, WFRPL contended that they should be granted extension of time by 132 days, that is till 21-11-2019.
The CERC accepted the contention of WFRPL and pushed the revised scheduled date of commissioning to 23-10-2019. However, WFRPL, preferred an appeal before APTEL.
Analysis:
The Court opined that the impugned judgment and the operative directions given therein are unsustainable as irrational and contrary to the scheme and the PPA.
The Court said that there were 5 PPAs, which have been entered between the parties on 21-07-2017 of 50 MW each. The wind power generation units which were subject matter of the 4 PPAs were in the same vicinity as in case of the 5th PPA. This appeal and impugned order relate only to the 5th PPA. WFRPL has not been able to operationalise this PPA by commissioning the wind power generation units. The four other PPAs have been operationised.
The Court said that the letters of WFRPL, dated 25-03-2019, stated that the project was at an advanced stage of completion and WFRPL shall be able to commission the project on or before 31-05-2019, subject to readiness of evacuation system. By another letter dated 25-04-2019, they stated that the evacuation systems have been ready for power evacuation from 14-04-2019.
Further, it said that WFRPL shall be able to operationalise and commission the 5th power station by 30-06-2019. However, the 5th power generation unit has not been operationalised even today.
The Court held that even otherwise, once WFRPL became aware and had knowledge that LTA was functional, and they had been granted benefit of 60 days in terms of the letter dated 22-10-2019 and 132 days in terms of the order of the CERC, the direction that the period of 132 days shall commence from the date the APTEL order is irrational. The objective and purpose of timelines is to ensure early supply of green energy and reduction of carbon footprint. Tariffs of green energy have come down substantially.
The Court noted that pursuant to the impugned judgment SECI had refunded Rs.10 crores to WFRPL, SECI having encashed the performance bank guarantee. Thus, it allowed SECI to recover the said amount along with simple interest at the rate of 12% per annum from the date when the payment was made till the amount is refunded by WFRPL.
The Court added that if the payment of Rs.10 crores along with interest as directed, is not refunded within six months from the date of this order, SECI will be entitled to recover Rs. 10 crores plus interest as per the provisions of the Electricity Act, 2003.
[Solar Energy Corporation of India Limited v. Wind Four Renergy Private Limited, 2024 SCC OnLine SC 219, decided on 27-02-2024]
Advocates who appeared in this case :
For Appellant(s): Senior AdvocateC. Aryama Sundaram, Senior Advocate M.G. Ramachandran, Advocate Anushree Bardhan, Advocate-On-Record Nikunj Dayal, AdvocateAneesh Bajaj
For Respondent(s): Advocate -On-Record T. Mahipal, Advocate Alok Krishna Agarwal, Advocate Naveen Chawla, AdvocateMayank Bughani, Advocate Prerna Singh, Advocate-On-Record Guntur Prabhakar, Advocate Ravi Kishore, Advocate Guntur Pramod Kumar
