M.KARPAGA VINAYAGAM, J. - (1.) ESSAR Power Limited is the Appellant herein.
(2.) AGGRIEVED by the Order dated 30.5.2011 passed by the Uttar Pradesh Electricity Regulatory Commission giving a direction in favour of the Noida Power Company, the second Respondent, instead of adopting tariff quoted by the Appellant under Section 63 of the Electricity Act, 2003, the Appellant has filed this Appeal.
(3.) THE short facts are as follows: (a) Essar Power Limited, the Appellant is a generating Company having generation capacity of 1600 MWs. The Uttar Pradesh Electricity Regulatory Commission (State Commission) is the Respondent -1. The 2nd Respondent is Noida Power Company Limited(Noida Power). Noida Power, a Distribution Licensee is carrying out the business Page 2 of 147 Judgment in Appeal No 82of 2011 of distribution of power in the area of Greater Noida in Western Uttar Pradesh. (b) To promote competitive procurement of electricity by distribution licensee and to facilitate transparency, fairness and level playing field in procurement process, the Central Government on 19.1.2005 framed and issued Guidelines under Section 63 of the 2003 Act. (c) On 25.3.2009 the Noida Power the (R -2), filed a petition seeking approval of State Commission of the bidding documents including the Request for Proposal (RFP) for procurement of 500 MW power through competitive bidding process under the said Section 63 read with Guidelines issued by the Central Government. (d) On 8.10.2009 the State Commission approved the bidding process along with bidding documents proposed by Noida Power (R -2) with the direction to Noida Power (R -2) to approach the Commission if any deviation other than that was allowed in this petition is made from the Standard RFP documents during the pre -bid meetings. (e) On 11.10.2010, the Noida Power Company(R -2) initiated the process of procurement 200 MW (± 20%) of power under Section 63 of the Act, 2003 on long term basis under tariff based Case -1 competitive bidding process as per Page 3 of 147 Judgment in Appeal No 82of 2011 Government of India guidelines and issued standard Request for Proposal (RFP) duly approved by the State Commission. (f) Accordingly, the six bidders participated in this case - I bidding process. Essar Power Limited, the Appellant was one among them. (g) In the process, the Appellant emerged as the lowest bidder offering evaluated tariff of Rs.4.0868 Paise per unit for 240 MW of power. Ultimately Evaluation Committee, set up by Noida Power (R -2) in accordance with Central Government's Guidelines, approved the bid of the Appellant as the successful bidder. (h) In pursuance of the same, the Noida Power Company (R - 2) filed a Petition on 7.4.2011 in Petition No.741 of 2011 before the State Commission under Section 63 of the Electricity Act, 2003 for adoption of the tariff quoted by Essar Power, the Appellant, being the successful bidder. (i) While the above petition was pending before the State Commission for adoption of tariff quoted by the Appellant, Noida Power (R -2) filed an interim application before the State Commission on 27.4.2011 stating that subsequent to the filing of the petition in case No. 741 of 2011 for adoption of the tariff quoted by the Appellant, the Noida Page 4 of 147 Judgment in Appeal No 82of 2011 Power (R -2) received a letter from another Company (3rd party) proposing to supply power to Noida Power (R -2) on Long Term Basis at a levelised tariff of Rs.3.667 per unit which is less than the tariff quoted by the Appellant and praying that appropriate Orders be passed after taking note of this fresh development. (j) On coming to know of the pendency of the main petition and the interim application, the Appellant through its representative appeared before the State Commission on 20.5.2011 and represented to the State Commission opposing the move for 3rd party negotiation and requesting for an opportunity of hearing to the Appellant before any Order is passed in the matter. In addition to the said oral request, the Appellant also filed an application seeking for its impleadment as a Respondent in the said pending proceedings. (k) However, without hearing the Appellant, on 30.5.2011, the State Commission passed the impugned Order permitting the Noida Power Company (R -2) to take necessary steps as per the provisions under clause 2.5 (b) (iii) of the Standard Documents of Request for Proposal (RFP) approved by the State Commission for procurement of power. Page 5 of 147 Judgment in Appeal No 82of 2011 (l) On the strength of the said impugned Order dated 30.5.2011, passed by the State Commission, the Noida Power (R -2) sent a letter dated 9.6.2011 to the Appellant and other bidders informing about the Order of the State Commission dated 30.5.2011 and calling upon them to submit the revised financial bid to match or offer the lower tariff than the levelised tariff of Rs.3.667 per unit quoted by the 3rd party Company. (m) Aggrieved by this, the Appellant has filed this Appeal challenging the legality of the impugned Order dated 30.5.2011 passed by the State Commission and the consequent letter dated 9.6.2011 sent by the Noida Power (R -2) to the Appellant. The Learned Counsel for the Appellant has made the following submissions assailing the impugned Order dated 30.5.2011: (a) The Competitive Bidding Process initiated in accordance with Section 63 of the Electricity Act, 2003 and guidelines issued by the Central Government there under are statutory in character. Noida Power Company (R -2) having elected to go through the said process under Section 63 of the Act, it should have followed the steps as provided in the guidelines to get the approval of the State Commission leading to signing of the PPA with the Appellant being the Page 6 of 147 Judgment in Appeal No 82of 2011 lowest bidder. This has been violated through the impugned Order. (b) Once the Appellant is declared as the lowest bidder in the competitive bidding process, the concluded contract has come into existence between the Essar Power (Appellant) and the Noida Power Company (R -2). On the basis of the Evaluation Committee's report that the Appellant's bid price of Rs.4.0868 per unit is comparable to the prevailing market rate, the Noida Power (R -2) had filed a petition on 7.4.2011 before the State Commission praying for adoption of the said tariff. This must lead to either adoption of tariff by the State Commission or rejection of the same. This has not been done in this case. (c) The Noida Power(R -2) while adopting the competitive bidding process cannot be permitted to negotiate with the 3rd party which did not participate in the bid. Such a process is outside the scope of the Section 63 of the Electricity Act, 2003. (d) The Appellant had furnished a bank guarantee, as per the bid condition and it had kept available a capacity of 240 MW during the bidding process. Due to the deviation of bid process, the Appellant has suffered a serious prejudice. The objective of the Electricity Act, 2003 is not only to Page 7 of 147 Judgment in Appeal No 82of 2011 protect the interest of the consumers but also to protect the interest of the Generating Company i.e. the Appellant. (e) The conduct of the Noida Power Company in attempting to negotiate with the 3rd party after the bid process is over, is unjust, inequitable and contrary to the objective of the guidelines notified by the Central Government. Hence, the impugned Order is liable to be set -aside.;