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Aikyam Holdings Private Limited v/s Karnataka Electricity Regulatory Commission

    Writ Petition Nos. 28664, 28665 of 2018
    Decided On, 28 February 2020
    At, High Court of Karnataka
    For the Appearing Parties: Shridhar Prabhu, B.N. Prakash, S. Sriranga, Niloufer Akbar, Advocates.

Judgment Text

1. First Petitioner company and the 2nd petitioner shareholder owning and operating an 8 MegaWatt Renewable Energy (Wind) based Power Project are knocking at the doors of Writ Court for laying a challenge to the order dated 29.05.2018 made by the 1st respondent-KERC at Annexure-A in O.P.No.28/2018, whereby the approval to the subject Power Purchase Agreement, has been denied; petitioners inter alia have also sought for a Writ of Mandamus to the KERC to approve the said Power Purchase Agreement.

2. After service of notice, the respondents having entered appearance through their Panel Counsel and resist the writ petitions by filing separate Statements of Objections. Both the learned Panel Counsel make vociferous submission in justification of the impugned order; they also seek disposal of the writ petitions as having become infructuous in view of compliance of interim order granted by this Court; however, it is difficult to non-suit the petitioners on the alleged ground of infructuousness since it was only an interim arrangement which obviously is subject to final outcome of the main matter.

3. Having heard the learned counsel for the parties and having perused the petition papers, this Court grants indulgence in the matter for the following reasons: (a) petitioner-company and the respondent-BESCOM had concluded the Power Purchase Agreement on 01.03.2017 as per Annexure-C, is not in dispute; the said agreement having been submitted by the BESCOM for approval earlier, was returned by the KERC and that later it was re-submitted by the seeking approval, is also not in dispute;

(b) the respondent-KPTCL vide Commissioning Certificate dated 28.03.2017, a copy whereof is at Annexure-H, specifically certified that the Project has been duly commissioned on 28.03.2017; this certificate is not in dispute; it refers to the Report dated 28.03.2017, of the Chief Engineer and the Report dated 25.03.2017, of the Chief Electrical Inspector; the Executive Engineer of respondent-BESCOM vide letter dated 19.01.2018, a copy whereof is at Annexure-K also mentions about generation of 511 units of power by the petitioner-company on 28.03.2017;

(c) the version of the respondent-KERC that the actual injection of the power energy into the grid is an essential ingredient for claiming the commercial operation, is not much in dispute; however, no such generation of power took place during anytime between 29.03.2017 & 31.03.2017, is only a half truth, not fairly stated by the KERC; on 28.03.2017, petitioner-company had generated the energy that entered the grid stands prima facie established going by what is already mentioned in the proceeding paragraphs at (a) & (b) above;

(d) the only ground for the KERC to disbelieve the assertion of the petitioner as to generation of 511 units of energy on 28.03.2017 is that no evidentiary material was produced by him to vouch the same; petitioner has specifically stated and the same was not disputed by the BESCOM that, the Meter at the Delivery Point having a high Multiplying Constant of 1,50,000 would not record the flow of paltry 11 units of power into the grid; nonproduction of extract of Log Book maintained by the BESCOM/KPTCL for the period between 29.03.2017 & 31.03.2017 is mischievously irrelevant when there is an uncontroverted version as to the flow of 511 units of energy into the grid at 23:03:25 and 23:18:28 hours on 28.03.2017;

(e) twice, the Power Purchase Agreement was submitted for the approval of KERC, and both the times the file was returned on the inarticulate premise that the Electricity Supply Companies entering into PPA was detrimental to their interest inasmuch as the increased drawal of renewable energy would result in backing down of the new Thermal Power Stations commissioned in the State and that it would result in the payment of fixed costs without drawing energy from such plants; the other reason was that the tariff of the Wind Energy Projects across the Country had come down, significantly; this assumptive premise raises a presumptive bias, pecuniary or otherwise, with which the KERC treated the claim for approval of PPA of the petitioners unmindful of huge investments of money done in the subject project; thus the impugned order is vitiated especially when the exercise undertaken by the KERC is required to be quasi judicial in nature vide PTC INDIA LTD -vs- CERC, 2010 4 SCC 603 paragraph 50;

(f) there is also force in the alternate contention of the petitioners that neither commissioning nor commercial operation nor generation of power within 31.03.2017 was necessary to avail the tariff of Rs.4.50 going by the KERC Order dated 24.04.2015 which governed the transaction in question regardless of its modification by subsequent Order dated 04.09.2017; the KERC is not justified in adopting the varied standards and changing the goal posts pursuant to 2017 Order when the control period of 2015 Order ought to have factored for consideration; the stand of the respondent-BESCOM is not fair to the petitioner; having submitted the petitioners PPA for approval that too not disputing their assertion as to flow of energy into the power grid on 28.03.2017, it could not have contended to the contrary as an unscrupulous businessman would do, only for the purpose of earning profit; the business standards expected of the instrumentalities of 'State' as defined under Article 12 of the Constitution of India are not the punctus punctilio of the market places; they have to satisfy the requirement of yardsticks of fairness/reasonableness obtaining in the field;

(g) there is force in the contention of the petitioners that they have been singled out for a differential treatment; the KERC has granted approval to all the Power Purchase Agreements enlisted in the Government Order dated 27.10.2017 except that of the petitioners though the Government had recommended for the grant of approval; strangely the projects for which the PPAs got KERC approval were not even commissioned till March 2018, whereas petitioners PPA was commissioned on 28.03.2017 i.e., almost a year before; the allegation of the petitioners is prima facie substantiated by the PPA and connected papers of OSTRO DAKSHIN POWER PVT. LTD., copies whereof are at Annexure-M; thus, the impugned order militates against the Equality Clause enshrined in Article 14 of the Constitution of India; this apart, the KERC having granted approval to other similarly, if not, less favourably circumstanced PPAs, has professed a particular standard by which the case of the petitioners need to be adjudged; Justice Frankfurter of U.S.Supreme Court in VITAReLLI vs. SEATON (359 US 535) had observed that an Executive Authority must be rigorously held to the standards by which it professes its action to be judged and that such Authority must scrupulously observe the professed standards on pain of invalidation of an Act in violation thereof; this principle is accepted as a norm of our legal system by the Apex Court in RAMANA DAYARAM SHETTY vs INTERNATIONAL AIRPORT AUTHORITY OF INDIA, 1979 3 SCR 1014; and,

(h) the last contention of the respondents that a Coordinate Bench of this Court vide judgment dated 23.07.2018 in identical Writ Petition No.13886-88/2018 between SURYA ENERGY PHOTO VOLTAIC INDIA PRIVATE LIMITED -VS- STATE OF KARNATAKA AND OTHERS has denied relief to the litigant therein and therefore petitioners herein too being similarly circumstanced cannot be granted relief, is untenable; true it is that the learned Co-ordinate Judge in the said case held that the approval of PPA by the KERC is a sine qua non for its acquiring enforceability; the essential lis in the case at hands is different from the one there; this Court has not only has no quarrel with the ratio of the said decision, but these writ petitions are structured on the said ratio itself, an argument by the petitioners a bit in variance therewith, notwithstanding; the said case is not an authority for the proposition that a party to the PPA can never challenge denial of approval thereto by the KERC; Lord Halsbury more than a century ago, in the celebrated case of QUINN vs. LEATHEM, 1901 495,A.C. 506 has observed as under:

"Now before discussing the case of Allen v. Flood, 1898 AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole la

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w, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all." In the above circumstances, these writ petitions succeed; a Writ of Certiorari issues quashing the impugned order dated 29.05.2018 at Annexure-A; a Writ of Mandamus issues to the 1st respondent-KERC to consider and approve the subject Power Purchase Agreement dated 01.03.2017 at Annexure-C in accordance with KERC Order dated 24.02.2015 and not under KERC Order dated 04.09.2017, and further to grant all consequential benefits flowing from such approval within eight weeks. Costs made easy, reluctantly.