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Solar Energy Corporation of India Limited vs. Wind Four Renergy Private Limited

Not available · 2024 INSC 160Decided 27 Feb 2024
Not available
Justice Sanjiv Khanna · Justice Dipankar Datta

Background

SECI, the nodal central agency for renewable energy, and Wind Four Renergy Private Limited (WFRPL) had signed five Power Purchase Agreements in 2017 for wind power units, with a commissioning deadline plus extensions available for delay. WFRPL failed to commission the fifth 50 MW unit on time and sought condonation of delay; the Central Electricity Regulatory Commission (CERC) allowed 132 days of delay to be condoned, computed from a fixed date. The Appellate Tribunal for Electricity (APTEL) instead ruled that the 132-day condoned period should run from the date of its own judgment (11.01.2022), effectively giving WFRPL far more time. SECI challenged this before the Supreme Court.

Decision Breakdown

The Supreme Court held that APTEL's direction was irrational and contrary to the scheme of the PPA, since WFRPL had already been given the benefit of extensions and knew the project's actual status well before APTEL's judgment. The Court set aside APTEL's order and restored CERC's original order fixing the commissioning timeline. It also directed that Rs. 10 crore SECI had refunded to WFRPL (after its bank guarantee was encashed) must be repaid by WFRPL with 12% interest, failing which it would be recovered as electricity dues under the Electricity Act.

Lesson Learnt

Contractual timelines and regulatory extensions in infrastructure/energy projects are computed on the facts as they stood at the relevant date, not reset to a later date convenient to the defaulting party. Courts will correct an appellate tribunal's order if it effectively rewards continued delay.

Official source (sci.gov.in)View Judgment (PDF)

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