IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JULY, 2019 BEFORE THE HON’BLE MR. JUSTICE P.B.BAJANTHRI WRIT PETITION No.27737/2019 & WRIT PETITION Nos.28097-28099/2019(GM-KEB) BETWEEN:
RISHABH BUILDWELL PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.196, GROUND FLOOR, RAM VIHAR, NEW DELHI-110 092, (REPRESENTED BY ITS AUTHORIZED SIGNATORY) ..PETITIONER (BY SRI SHRIDHAR PRABHU, ADVOCATE) AND:
1. HUBLI ELECTRICITY SUPPLY COMPANY LIMITED (WHOLLY OWNED GOVERNMENT OF KARNATAKA UNDERTAKING) A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT NAVANAGAR, P.B. ROAD, HUBBALLI-580 025, REPRESENTED BY ITS MANAGING DIRECTOR.
2.KARNATAKA ELECTRICITY REGULATORY COMMISSION NO.16, C-1, MILLERS TANK BED AREA, VASANTH NAGAR, BENGALURU-560 052, (REPRESENTED BY ITS CHAIRPERSON) 3.KARNATAKA POWER TRANSMISSION CORPORATION LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT KAVERI BHAVAN, K.G. ROAD, BENGALURU-560 009, (REPRESENTED BY ITS MANAGING DIRECTOR) 4.KARNATAKA RENEWABLE ENERGY DEVELOPMENT LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT #39, "SHANTHIGRUHA", BHARATH SCOUTS & GUIDES BUILDING, PALACE ROAD, BENGALURU-560 001, (REPRESENTED BY ITS MANAGING DIRECTOR) ..RESPONDENTS (BY SRI S SRIRANGA, ADVOCATE FOR R-1 & R-3, SRI P N PRAKASH, ADVOCATE FOR R-2, SRI M V CHARATI, ADVOCATE FOR R-4, ) THESE WRIT PETITIONS ARE FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO:
QUASH THE COMMUNICATION DATED:20.05.2019 ANNEXURE-A ISSUED BY R-1.
QUASH THE COMMUNICATION DATED:30.10.2018 [ANNEXURE-B] ISSUED BY THE R-2.
DIRECTION OF THE LIKE NATURE TO R-1 TO PAY TARIFF OF RS.4.95 TO THE PETITIONER PROJECT UNDER POWER PURCHASE AGREEMENT DATED:23.05.2016 [ANNEXURE- C] BETWEEN THE R-1 AND PETITIONER.
DECLARE THE SUPPLEMENTAL POWER PURCHASE AGREEMENT DATED:14.08.2018 [ANNEXURE-D] BETWEEN THE R-1 AND PETITIONER AS NULL AND VOID.
DIRECT THE R-1 HESCOM TO REFUND THE ILLEGALLY DEDUCTED AMOUNT OF RS.84,00,00/- [RUPEES EIGHTY FOUR LAKHS ONLY] ALONG WITH THE INTEREST AGREED UNDER THE POWER PURCHASE AGREEMENT DATED:23.05.2016 [ANNEXURE-C] DONE AT THE BEHEST OF THE R-2.
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING `B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER In the instant petition, petitioner has sought for the following reliefs:
Quash the Communication dated:20.05.2019 Annexure-A issued by R- 1.
Quash the Communication dated:30.10.2018 [Annexure-B] issued by the R-2.
Direction of the like nature to R-1 to pay tariff of Rs.4.95 to the petitioner project under Power Purchase Agreement dated:23.05.2016 [Annexure-C] between the R-1 and petitioner.
Declare the Supplemental Power Purchase Agreement dated:14.08.2018 [Annexure- D] between the R-1 and petitioner as null and void.
Direct the R-1 HESCOM to refund the illegally deducted amount of Rs.84,00,00/- [Rupees Eighty Four Lakhs only] along with the interest agreed under the Power Purchase Agreement dated:23.05.2016 [Annexure-C] done at the behest of the R- 2.
2. Petitioner and Hubli Electricity Supply Company Limited (for short `HESCOM’) entered into agreement relating to power generation and supply. As per the terms and conditions petitioner was required to commence the project within the stipulated time. There is a delay of about 172 days for which there is clause that petitioner is liable to pay liquidated damages in terms of Article 5.8 of the Agreement. It was initially settled among the petitioner and HESCOM to the extent of determining delay of 52 days and consequently delay was condoned and amount of liquidated damages was fixed at Rs.84 lakhs and same has been deducted from the petitioner’s bill.
3. When things stood thus, there was internal communication between HESCOM and Karnataka Electricity Regulatory Commission (‘KERC’ for short). KERC had sought certain information from HESCOM relating to delay. Further HESCOM has made a communication to the Secretary, KERC relating to number of days of delay and its calculation.
4. Perusal of communication dated 30.10.2018 – Annexure-B it is stated: “In default of the Developer filing the petition, within a period of 45 days from the date of receipt of this letter, the HESCOM shall, recover the liquidated damages, for the entire period of Four(4) months, as provided in the Article 5.8 of the PPA.”
5. Such a condition imposed before issuing notice to the petitioner and seeking explanation is incorrect. Further in the communication dated 20.05.2019 between HESCOM and Secretary, KERC, HESCOM has sought certain information. During this correspondence among HESCOM and KERC had presumed petitioner has presented such petition. The presumption on the score there would be action in terms of the communication dated 30.10.2018 to the extent if there is a default on the part of the petitioner in filing petition within a period of 45 days from the date of receipt of letter dated 30.10.2018 HESCOM was mandate to recover liquidated damages for the entire period of four months in terms of Article 5.8 of PPA.
6. On perusal of the records, it is evident that on one hand HESCOM has settled the delay issue while condoning the delay and so also determined Rs.84 lakhs for delay of 52 days and consequently it has already deducted from the petitioner’s bill and the matter was settled. However at the behest of KERC and HESCOM matter is reopened.
7. On perusal of Annexures-A and B, it is evident petitioner has not been heard before directing the petitioner in default of filing petition within 45 days HESCOM shall recover liquidated damages for entire delayed period. It is nothing but a final order. In the absence of hearing petitioner, KERC has committed error in issuing Annexure-B insofar as portion stated supra.
8. In view of these facts, respondents are hereby directed to not to precipitate the matter till KERC adjudicates and issues notice under Section 86(1)(f) of the Electricity Act, 2003. All the parties are hereby directed to appear before the KERC and place records. KERC is hereby requested to decide disputed issue if any after due opportunity of hearing, within three months from the date of receipt of this order.
All the contentions of both parties are left out and they are permitted to urge the same before KERC at the earliest.
Accordingly, writ petitions stand disposed of.
Sd/- JUDGE SBN