Legal Reference Library

In Energy Watchdog v. Central Electricity Regulatory Commission, the issue involving the Power Purchase Agreement (PPA) entered into by the Government and the Adani Enterprises, where the Power Generating Company had pleaded that the rise in price of coal consequent to change in Indonesian law would be a force majeure event which would entitle the respondents to claim compensatory tariff, the bench of P.C. Ghose and R.F. Nariman, JJ held that the change in the Indonesian Law was neither the fundamental basis of the contract dislodged nor was any frustrating event and that alternative modes of performance were available, albeit at a higher price. The respondents had pleaded before the Appellate Tribunal for Electricity to either discharge them from the performance of the PPA on account of frustration, or to evolve a mechanism to restore the petitioners to the same economic condition prior to occurrence of the change in law as the rise in the price of Indonesian coal, according to them,...

Appellate Tribunal for Electricity Kochi Salem Pipeline Pvt. Ltd. and Ors. v. Petroleum & Natural Gas Regulatory Board MANU/ET/0097/2016 02.09.2016 Commercial  Unless there is fraud of beneficiary or irretrievable harm or injury, Courts are not to interfere with encashment of Bank Guarantees Appellant No. 1 a Joint Venture Company formed for specific purpose of constituting, commissioning and operating Kochi-Coimbatore-Erode-Salem LPG Pipeline. A consortium of Appellant No. 2 ("Bharat Petroleum Corporation Ltd. - BPCL") and Appellant No. 3 ("Indian Oil Corporation Ltd.-IOCL") with Appellant No. 2 as lead partner has been selected by Respondent Board for grant of authorization for said Pipeline. Letter of Intent issued by Respondent-Board in term of which Appellant No. 2 was directed to submit Performance Bond/Bank. Pursuant thereto Respondent Board issued a Letter of Authorisation ("LOA"). One of conditions in said LOA was that, entity was...

In a 498 page judgment on appeals filed by the Adani, Tata, GMR and other groups, the Hon'ble Appellate Tribunal For Electricity clarified various issues including :- a) Definition of "Composite Scheme" b) Jurisdiction of CERC in "Composite Schemes" c) Alteration of tariff by the CERC The Hon'ble Tribunal decided that the supply of power to more than one State from the same generating station of a generating company, ipso facto, qualifies as ‘Composite Scheme’ to attract the jurisdiction of the Central Commission under Section 79 of the said Act. Further the Hon'ble Tribunal quashed the regulatory powers of CERC under Section 79(1)(b) of Act, to alter or modify the tariff which has been determined by way of a competitive bidding process, holding that the CERC may by way of its adjudicatory powers under section 79(1)(f) of the Act, award relief to the power generating companies as per the provisions of the PPA if a case of force majeure is made out.

The tariff fixed in a power purchase agreement (PPA) is not sacrosanct and it could be reviewed by the State Electricity Regulatory Commission, which is the statutory authority for fixing tariff under the Electricity Act, the Supreme Court ruled last week in its judgment, Gujarat Urja Vikas Nigam Ltd vs Tarini Infrastructure Ltd. The state regulatory commission had declared that it had no such power to review. However, the appellate tribunal decided that the commission did have the power.