M/S Bangalore Electricity Supply Company LTD vs. Chidanand Basaprabhu Kore Sahakari Sakkare Karkahane Niyamit

Facts

The review petitioners, five electricity supply companies in Karnataka, are challenging a High Court order dated July 26, 2021, passed in W.P.No.101557/2021. The original writ petition was filed by respondent No. 1, Chidanand Basaprabhu Kore Sahakari Sakkare Karkhane Niyamit, seeking to quash certain letters and a direction to honour a Power Purchase Agreement (PPA) for five years from January 18, 2018. The High Court had disposed of the writ petition by following a co-ordinate bench's order in a similar case, Sri.Renuka Sugars Limited & others vs. State of Karnataka & others. The review petitioners argue that the PPA in the present case had a different commencement and expiry date compared to the PPAs in the cited case, leading to an error in the original order.

Held

The Court held that the original order dated July 26, 2021, passed in W.P.No.101557/2021 contained an error apparent on the face of the record. The reasoning was that the PPA in the instant case, executed in 2018, had a term that was to expire on March 31, 2021. The reliance on the decision in Sri.Renuka Sugars' case was misplaced because the PPAs in that case had different terms. The direction in the impugned order to honour the PPA for five years from 2018 was contrary to the specific terms of the PPA in this case, which stipulated expiry on March 31, 2021. Consequently, the impugned order was modified. The Court directed the Karnataka Electricity Regulatory Commission (KERC) to determine the tariff payable to respondent Nos. 1 to 3 for the period from April 1, 2021, up to the date they supplied electricity to the review petitioners. The KERC was directed to comply with this within three months.

Key Issues

1. Whether the High Court erred in disposing of W.P.No.101557/2021 by relying on the decision in Sri.Renuka Sugars Limited & others vs. State of Karnataka & others, given the differing terms of the Power Purchase Agreements (PPAs)? Petitioner's arguments: The petitioners contend that the PPA in the present case was executed in 2018 and was to expire in 2020-2021, whereas the PPA in the Sri.Renuka Sugars case had a term from 2016-2017 to 2020-2021. The original order directed the petitioners to honour the PPA for five years from 2018, which contradicts the PPA's terms and the fact that it expired on March 31, 2021. This constitutes an error apparent on the face of the record. Respondents' arguments: Respondents 1 to 3 argue that they continued to supply electricity after the PPA's expiry on April 1, 2021, and payments are due. They seek directions for payment. The review petitioners counter that in the absence of a Tariff order from the Karnataka Electricity Regulatory Commission (KERC) after April 1, 2021, the tariff for electricity supplied would need to be determined by the KERC under Section 64(5) of the Electricity Act.