KARNATAKA POWER TRANSMISSION CORPORATION LIMITED versus JSW ENERGY LIMITED (EARLIER KNOWN AS JINDAL THERMAL POWER COMPANY LIMITED & JINDAL TRACTABEL POWER COMPANY LIMITED) & ORS.

KARNATAKA POWER TRANSMISSION CORPORATION LIMITED versus JSW ENERGY LIMITED (EARLIER KNOWN AS JINDAL THERMAL POWER COMPANY LIMITED & JINDAL TRACTABEL POWER COMPANY LIMITED) & ORS.

The Supreme Court held that on the facts the parties contemplated a written PPA and were not ad idem on essential terms left open for negotiation before 01.06.1999; therefore there was no 'concluded contract' within the meaning of the proviso to s.27(2) of the Karnataka Electricity Reforms Act, 1999 and the proviso did not bar the Commission’s regulatory jurisdiction; the High Court's finding of a concluded contract was set aside and the matters as to (i) whether the plant was IPP or CPP and (ii) whether the Commission's orders were perverse were remitted to the High Court for reconsideration.

Parties
Appellant: Karnataka Power Transmission Corporation Limited; First Respondent: JSW Energy Limited (earlier known as Jindal Thermal Power Company Limited & Jindal Tractabel Power Company Limited)
Jurisdiction
India
Judgment Date
22 November 2022
Procedural Posture
Civil Appeal / Appeal Disposed / Judgment on Appeal
Outcome
Appeal partly allowed
Legal Topics
Power Purchase Agreement, Tariff Regulation, Concluded Contract, Promissory Estoppel, Judicial Review of Regulatory Orders
Electricity Law Contract Law Administrative Law Power Purchase Agreement Tariff Regulation Concluded Contract Promissory Estoppel Judicial Review of Regulatory Orders

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Parties

Karnataka Power Transmission Corporation Limited

Appellant

JSW Energy Limited (earlier known as Jindal Thermal Power Company Limited & Jindal Tractabel Power Company Limited)

First Respondent

Procedural Posture

Civil Appeal / Appeal Disposed / Judgment on Appeal

Legal Issues

  1. 1 Whether a 'concluded contract' within the meaning of the proviso to s.27(2) of the Karnataka Electricity Reforms Act, 1999 existed as on 01.06.1999
  2. 2 Whether the Karnataka Electricity Regulatory Commission had jurisdiction to regulate tariff where such concluded contract existed
  3. 3 Whether the generating plant was a Captive Power Plant (CPP) or an Independent Power Producer (IPP)

Ratio Decidendi

The Supreme Court held that on the facts the parties contemplated a written PPA and were not ad idem on essential terms left open for negotiation before 01.06.1999; therefore there was no 'concluded contract' within the meaning of the proviso to s.27(2) of the Karnataka Electricity Reforms Act, 1999 and the proviso did not bar the Commission’s regulatory jurisdiction; the High Court's finding of a concluded contract was set aside and the matters as to (i) whether the plant was IPP or CPP and (ii) whether the Commission's orders were perverse were remitted to the High Court for reconsideration.

Court Disposition

Appeal partly allowed

Orders

  • Impugned High Court finding that a concluded contract existed under the proviso to s.27(2) set aside
  • Matter remitted to the High Court to reconsider points 3 and 4 (status as CPP or IPP and whether Commission's orders were perverse/arbitrary)