MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED Vs. AMR POWER PRIVATE LIMITED
LAWS(SC)-2016-9-63
SUPREME COURT OF INDIA
Decided on September 15,2016

Mangalore Electricity Supply Company Limited Appellant
VERSUS
Amr Power Private Limited Respondents

JUDGEMENT

L.NAGESWARA RAO,J. - (1.) Mangalore Electricity Supply Company Ltd. (MESCOM), the Appellant herein, is a distribution licensee. M/s. AMR Power Private Limited, the First Respondent herein, is a renewable power generator which has developed and is operating a 24.75 MW run of the river mini hydel power project in the State of Karnataka. The Karnataka State Electricity Regulatory Commission is the Second Respondent in the present Appeal.
(2.) The Appellant and the First Respondent entered into a Power Purchase Agreement (hereinafter referred to as 'PPA') on 02.08.2006 for the supply of 24 MW of electricity. It was mentioned in the PPA that the Government of Karnataka accorded its sanction to the proposal of the First Respondent for installation of a mini hydel electric power generating station of 24 MW capacity across River Netravathi, Dakshina Kannada District and that the Appellant was permitted to enter into a PPA with the First Respondent for purchase of electricity. Article 5 of the PPA provides for payment of Rs 2.80 per kilowatt-hour for the first 10 years for the delivered energy. From the 11 th year onwards, the PPA provides that the Appellant shall pay to the company a rate determined by the Commission for the energy delivered at the metering point. Article 6 of the PPA deals with billing and payment, Article 9 covers the term, termination and default of the PPA. As per Article 9.1.1, the PPA shall continue to be in force for a period of 20 years from the commercial operation date and may be renewed for a period of 10 years on such terms and conditions as may be mutually agreed upon. Article 6 and Article 9 which fall for consideration in this case will be dealt with in detail in the subsequent paragraphs. On 04.08.2008, the First Respondent increased the capacity from 24 MW to 24.75 MW.
(3.) The First Respondent started generating power and commenced supply of electricity to the Appellant on 12.09.2009. The First Respondent approached the Karnataka Electricity Regulatory Commission, the Second Respondent herein, by filing O.P. No. 28 of 2009 for a declaration that the PPA executed on 02.08.2006 was null and void. A further relief for grant of open access was also sought by the First Respondent. An interim order was passed by the Second Respondent Commission on 27.08.2009 directing the Appellant to synchronize the plant and pay for the power at the rate of Rs. 2.80 per unit pending final adjudication. The Second Respondent Commission dismissed O.P. No. 28 of 2009 on 23.12.2010. Pursuant to the observations made in the said order dated 23.12.2010, the First Respondent requested the Appellant to revise the tariff which was not considered by the Appellant. The First Respondent also filed a review of the order passed in O.P. No. 28 of 2009 which was dismissed on 22.12.2011.;


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