Solar Energy Corporation of India Limited (SECI) vs Wind Four Renergy Private Limited and Others

IN THE SUPREME COURT OF INDIA 2024 INSC 160 CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2451 OF 2022

SOLAR ENERGY CORPORATION OF INDIA LIMITED (SECI) APPELLANT(S)

VERSUS

WIND FOUR RENERGY PRIVATE LIMITED & ORS. RESPONDENT(S)

J U D G M E N T

1. The appellant – Solar Energy Corporation of India Limited 1

impugns the judgment and order dated 11.01.2022 passed by

the Appellate Tribunal for Electricity2 at New Delhi,

whereby the appeal preferred by respondent no. 1 – Wind Four

Renergy Private Limited3 was allowed, directing 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.

2. Respondent no. 1 - WFRPL and respondent no. 3 – Power

Trading Company India Limited4 had entered into five Power

Purchase Agreements5 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. The

1 “SECI”, for short.

Signature Not Verified

2 “APTEL”, for short.

Digitally signed by Deepak Guglani Date: 2024.03.02 3 “WFRPL”, for short.

14:00:23 IST Reason:

4 “PTC”, for short.

5 “PPA”, for short.

1 appellant – 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 Date6/commissioning was 04.10.2018, 18

months from the date of the Letter of Award 7 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.

3. It is an accepted and admitted position that the inter-state

transmission licensee – Power Grid Corporation of India

Limited was unable to operationalise the Long Term Access 8,

which was required and necessary to implement and comply

with the PPAs. The LTA was subsequently operationalised on

14.04.2019.

4. In terms of the letter dated 22.10.2019 issued by the

Ministry of New & Renewable Energy, Government of India

certain concessions and extension of milestones in wind

power projects were granted. 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, subsequent to operationalisation of LTA. This is

the additional time to be provided to the

6 “SCOD”, for short.

7 “LoA”, for short.

8 “LTA”, for short.

2 generator/developer to complete the commissioning activities

after the inter-state transmission system is ready.

5. It is conceded before us by the appellant that WFRPL would

be entitled to extension of the commissioning date till

13.06.2019 on account of the period of 60 days, as

stipulated in the letter dated 22.10.2019. Accordingly, the

additional time allowed with payment of liquidated damages

and the reduction of tariff and the maximum period allowed

for commissioning, that is, 9 months and 27 months from the

date of issue of LoA, will be computed.

6. WFRPL had approached the Central Electricity Regulatory

Commission9, New Delhi, 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.

7. The CERC, by its order dated 08.03.2021, accepted the

contention of WFRPL. Accordingly, the revised scheduled date

of commissioning was pushed to 23.10.2019. This order was

accepted by the appellant - SECI. The effect thereof would

be that the additional time of 9 months allowed after the

scheduled date with liquidated damages and reduction of

tariff and the last date of the maximum period allowed for

commissioning, that is, 27 months from the date of the LoA,

will accordingly be computed.

9 “CERC”, for short.

3

8. WFRPL, however, preferred an appeal before the APTEL, which

appeal, as stated above, has been allowed with the direction

that the period of 132 days, for which delay has been

condoned, would commence from the date of judgment in the

appeal by APTEL, that is, from 11.01.2022.

9. We have heard learned counsel for the parties at some length

and are of the opinion that the impugned judgment and the

operative directions given therein, are unsustainable as

irrational as well as being contrary to the scheme and the

PPA.

10. It is an accepted position that there were 5 PPAs, which

have been entered into 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 located in the same

vicinity as in case of the 5th PPA. This appeal and impugned

order relates 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.

11. We have on record the letters of WFRPL, dated 25.03.2019,

stating that the project was at an advance 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 written by WFRPL,

they had stated that the evacuation systems have been made

ready for power evacuation with effect from 14.04.2019.

4 Further, WFRPL shall be able to operationalise and

commission the 5th power station by 30.06.2019. However, as

accepted before us by WFRPL, the 5th power generation unit

has not been operationalised even today.

12. 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, it

is well known, have come down substantially.

13. In view of the aforesaid position, we set aside the impugned

judgment dated 11.01.2022. The order dated 08.03.2021 passed

by the CERC is restored and will operate and bind the

parties.

14. We are informed that pursuant to the impugned judgment, the

appellant – SECI had refunded Rs.10 crores to WFRPL, SECI

having encashed the performance bank guarantee. The

appellant - SECI would be entitled 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. In case the payment of Rs.10

crores along with interest as directed, is not refunded

within six months from the date of this order, the appellant

5

- SECI will be entitled to recover Rs. 10 crores plus

interest as per the provisions of the Electricity Act, 2003.

Thus, in case of default and non-payment within the time

stipulated, the principal amount of Rs.10 crores, as well

as, simple interest at the rate of 12% per annum accrued

thereon, will be treated as electricity dues and accordingly

be recovered along with interest, as applicable, in

accordance with the Electricity Act, 2003 and the applicable

rules.

15. The appeal is allowed and disposed of in the above terms.

Pending application(s), if any, shall stand disposed of.

.................J. (SANJIV KHANNA)

.................J. (DIPANKAR DATTA) NEW DELHI;

FEBRUARY 27, 2024.

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ITEM NO.8 COURT NO.2 SECTION XVII

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

CIVIL APPEAL NO. 2451 OF 2022

SOLAR ENERGY CORPORATION OF INDIA LIMITED (SECI) APPELLANT(S)

VERSUS

WIND FOUR RENERGY PRIVATE LIMITED & ORS. RESPONDENT(S)

(FOR ADMISSION and I.R. and IA No.45753/2022-EX-PARTE STAY and IA No.46347/2022-PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ ANNEXURES)

Date : 27-02-2024 This matter was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE DIPANKAR DATTA

For Appellant(s) Mr. C. Aryama Sundaram, Sr. Adv.

Mr. M.G. Ramachandran, Sr. Adv.

Ms. Anushree Bardhan, Adv.

Mr. Nikunj Dayal, AOR Mr. Aneesh Bajaj, Adv.

For Respondent(s) Mr. T. Mahipal, AOR Mr. Alok Krishna Agarwal, Adv.

Mr. Naveen Chawla, Adv.

Mr. Mayank Bughani, Adv.

Ms. Prerna Singh, Adv.

Mr. Guntur Prabhakar, AOR Mr. Ravi Kishore, Adv.

Mr. Guntur Pramod Kumar, Adv.

UPON hearing the counsel the Court made the following O R D E R

The appeal is allowed and disposed of in terms of the signed

non-reportable judgment.

Pending application(s), if any, shall stand disposed of.

(DEEPAK GUGLANI) (R.S. NARAYANAN) AR-cum-PS ASSISTANT REGISTRAR

(signed non-reportable judgment is placed on the file)

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