P .S.DATTA - (1.) Power Grid Corporation of India Limited, a Central Transmission Utility within the meaning of section 38 of the Electricity Act, 2003 implemented the transmission system associated with SEWA II Hydro Electric Plant of NHPC Limited. One of the Assets, called Asset II which is the subject matter of the present appeal is the '' Second Circuit of 132 kV D/C Sewa II - Hiranagar line along with associated bays at Hiranagar sub -station.'' On 18.7.2005 the Board of Directors of the appellant approved an investment of Rs.98.47crore including Interest During Construction of Rs.4.73 crore based on 4th quarter 2004 price levels. The appellant negotiated and entered into an indemnity agreement with NHPC dated 22.7.2005 containing the terms and conditions mutually agreed to between the appellant and NHPC. The agreement provided for matching the commissioning schedule of the generating station and the associated transmission system. Also, the agreement provided for indemnification by the defaulting party in case of delay in the commissioning. The clause is ''In the event of delay in commissioning of generating units vis a vis ATS the defaulting party shall pay the Interest During Construction (IDC) including the Foreign Exchange Rate Variation (FERV) and Govt. Guarantee fee if any for generating units and ATS calculated as lower of the two, up to a period of six months from the zero date. However, the defaulting party shall pay the indemnification claim only in case of revenue loss or part thereof suffered by the other party due to delay in commissioning by the defaulting party.' 'The zero date for operation of the indemnification clause was agreed to be 1.6.2008 , and as per the Investment Approval the transmission system was to be commissioned within 27 months of the date of the Letter of Award for Tower Package. The date of award of the Tower Package was 7.2.2006 and accordingly the scheduled commercial date was May, 2008. But , neither the generation project of NHPC nor the Associated Transmission system of the appellant was ready for commercial operation as on the schedule time of May, 2008 as envisaged on account of three reasons, namely a) delay in work due to agitation during the period from June,2008 to August,2008, b) there was delay in forest clearance by the Government of Jammu & Kashmir and the approval for forest clearance for 4.7 kilometres of line length having been received in November, 2008 only, c) dispute over Right of Way in Kathua section , d) non - completion of the generating station of SEWA II Hydro Electric Project being executed by NHPC. Though the circuit was ready by 31.3.2009 it could not be declared under commercial operation due to non -availability of SEWA -II generation. The SEWA II generation has been commissioned by NHPC on 30.6.2010 following which the line was ready and was declared under commercial operation with effect from 1.7.2010. Since the indemnity was only for six months from the zero date and both the generation project and transmission project were delayed for more than six months the indemnification clause was not applicable in the circumstance.
(2.) ON 4.12.2010 the appellant filed a petition , being petition no 325 of 2010 for approval of transmission tariff for the concerned lines. The Central Commission while passing the impugned order on 10.8.2011 held that the delay in the commissioning the transmission system from May,2008 to 31.3.2009 was justified and accordingly allowed the Interest During Construction for the said period for Asset II ( as also for Asset I which was related to ''one circuit of 132 kV D/C SEWA II - Hiranagar line along with associated bays at Hiranagar sub -station and one circuit of 132 kV D/C SEWA II Mahanpur line along with associated bays at Mahanpur '') But the Commission turned down the prayer of the appellant for INTEREST DURING CONSTRUCTION and IEDC for the period from 1.4.2009 to 30.6.2010. Hence the appeal.
(3.) ACCORDING to the appellant, the Commission erred in not appreciating the following: - (a) Though the transmission lines were ready for commissioning on 31.3.2009 the same could not be commissioned as the Power Department of the Government of Jammu and Kashmir did not allow such commissioning till 5.8.2009.(b) The Asset II could not be commissioned independent of Asset I.(c)The Asset II could not be commissioned as the SEWA II Hydro Electric Project was not ready for commissioning . The Asset II was commissioned on 1.7.2010 along with the commissioning of the SEWA II Hydro Electric Project. (d) In the circumstance, the appellant was not in a position to avail itself of the indemnification clause .(e)The indemnification provision in the agreement with the NHPC could not be unilateral and could be only based on negotiation and mutual agreement wherein both the parties build up limitation of liability terms to protect themselves against unlimited liabilities. (f) there was delay in forest clearance.(g) there was dispute as to the right of way. There are 18 respondents including the Central Electricity Regulatory Commission, the respondent no 1 who is represented by Mr.Manu Seshadri, the learned Advocate and who in course of his submission supported the reasoning of the Central Commission made in the impugned order. The other respondents include four distribution companies of the State of Rajasthan, Punjab State Electricity Board,, Himachal Power Purchase Centre, Power Development Department of the Government of Jammu &Kashmir, Uttar Pradesh Power Corporation Limited, Delhi Transco Ltd., BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd, North Delhi Power Ltd., Chandigarh Administration, Uttarakhand Power Corporation Ltd., North Central Railway, and New Delhi Municipal Council. Of these respondents the Uttar Pradesh Power Corporation Limited, the respondent no 13, and the BSES Rajdhani Power Ltd, the respondent no 10 have filed their counters which require mentioning. Mr. R.B Sharma, learned Advocate appeared for the BSES Rajdhani Power Ltd and Mr.Pradeep Mishra along with Mr.Suraj Singh, learned Advocates appeared for the respondent no 13, the Uttar Pradesh Power Corporation Ltd and they made their respective submissions strictly in line with their written responses. As said earlier, the Central Commission made oral submission in justification of the order complained of. Other respondents did not contest.;