DLF POWER LIMITED Vs. GOVERNMENT OF ASSAM

JUDGEMENT

(1.) THESE applications have been made by the applicant under Section 11 (3) of the Arbitration and Conciliation Act for appointment of an Arbitrator. The applicant is engaged in business of generating and supplying power to the state Electricity Board and other purchasers. It is claim of the applicant that the respondent in AA No. 236/05 (Government of Assam) stood guaranteer for respondent Assam State Electricity Board in AA No. 136/05 for due fulfillment of power purchase agreement entered into between the applicant and the State electricity Board. It is stated that a dispute arose between the applicant and assam State Electricity Board due to failure on the part of the respondents to make payment to the applicant company. The applicant sought appointment of arbitrator in terms of the Arbitration Clause.

(2.) IT has been submitted by the Petitioner that all the claims are on account of techno commercial issues relating to one or other articles of power purchase agreement, and does not involve determination of tariff. It has been contended that under Section 86 (1) (f) of the Electricity Act, 2003 the electricity Regulatory Commission discharges an adjudicatory function in resolving disputes and the scope of said function is not wide to take in "all" disputes that may arise between the parties and a restrictive meaning is required to be given as the Electricity Regulatory Commission is only in the nature of a Tribunal with specific objectives, functions and powers. It has been further submitted that merely because the expressions dispute and adjudication is used, that by itself is not indicative of the wide amplitude encompassing all/any disputes between the parties which are outside the scope of scheme of the Electricity Act 2003. It has been further contended that the Electricity regulatory Commission being a creature of statutes has to confine itself to discharge of specific functions entrusted to it within the specific powers given to it. Further, a clause agreeing to refer disputes to arbitration in a contract is itself an independent contract and is enforceable. It has been further argued that the Electricity Act being prospective in nature cannot operates retrospectively so as to take all vested rights that are created by the previous statutes as there is no such provision to presume that the Act operates retrospectively. Moreover, there is nothing in the provisions of the Electricity act which indicates that the commission alone shall adjudicate the disputes between stakeholders instead of allowing the parties to agree upon various terms including dispute resolution mechanism, either through arbitration or otherwise.

(3.) ON the other hand, the Respondent has contended that in view of specific provision under Section 86 (1) (f) providing for statutory function of adjudication in the Assam Electricity Regulatory Commission (AERC), the dispute resolution through Arbitration provided in the Power Purchase Agreement stands superseded and no longer applicable as envisaged under the Arbitration and conciliation Act, 1996. It was further contended that as per the Electricity act, it is for the AERC (State Commission) to decide on the adjudication of all disputes and differences between the DLF and ASEB in regard to matters concerning the sale of electricity by the DLF to ASEB and move particularly the tariff matters. Further, the Electricity Act provides for a complete code for adjudication of the disputes between the parties in regard to sale and purchase of electricity and to the extent thereof and if the State Commission decides to adjudicate on the disputes, such disputes are not to be submitted to arbitration. Accordingly, the provisions of sub sections (5) (6) of Section 11 of the Arbitration Act, 1996 shall have no application to the reference of disputes and differences between DLF and ASEB and the petition filed by DLF is therefore not maintainable.