TARINI INFRASTRUCTURE LIMITED Vs. GUJARAT ELECTRICITY

JUDGEMENT

(1.) THIS appeal is directed against the order dated 7.9.2010 passed by the Gujarat State Regulatory Commission, the Respondent No.-3 herein whereby it held that the transmission line laid by the appellant, M/s Tarini Infrastructure Ltd. which was involved in the development of small and medium hydro electric projects in India from the switch yard at Madhuban Dam to Mota Pandha to be the line belonging to the Gujarat Electricity Transmission Corporation Ltd., the Respondent No.1 herein. The facts are these.

(2.) THE Govt. of Gujarat issued a policy for promoting the development of hydel projects in the State. In terms of the policy, the Narmada Water Resources, a statutory body of the Govt. of Gujarat called for the bids from private parties for building small hydro generation projects in River Daman Ganga at Madhuban reservoir which is about 35 kms. from Bapi in the district of Valsad. The Daman Ganga dam is a major irrigation project across the river Daman Ganga in the state of Gujarat. The Appellant participated in the bid process for taking up the development of small hydro power project on the river Daman Ganga and was declared as a successful bidder. It was awarded the Concession for building two small hydro power projects of 3 MW (2 X 1500 KW) and 2.6 MW (1 X 2600 KW) at Daman Ganga / Madhuban reservoir by the Narmada Water Resources. The power plants are at a distance of 1 km. of each other and were to be connected to the nearest sub-station of the Gujarat Electricity Board which is the predecessor and interest of Gujarat Urja Vikas Nigam Ltd., the respondent no.2 herein. In terms of the tender document, the said nearest sub-station was less than 4 kms. from the dam. Accordingly, the Concession Agreement was entered into by the Narmada Water Resources with the appellant on 27.8.2007. A Detailed Project Report (DPR) was submitted any terms thereof the projects were to be completed within 24 months from the date of the start of the project. The power can be stepped up to 11/33 KV level at the switch yard of the Generating Station for further evacuation of the same to the nearest 66 KV sub-station at Rakholi. In terms of the Concession Agreement, the Narmada Water Resources by way of long term lease provided the project site, use of water to generate power and exclusive right to develop and construct the projects and maintain the same. In terms of the Concession Agreement, the projects were to be transferred to the Narmada Water Resources at the end of 35 years. The appellant was required to pay the Narmada Water Resources a license fee of 0.23 paisa per unit of the electricity produced and transmitted to the inter-connection point. According to the appellant, in the DPR for the two projects, the total cost was estimated at Rs.1692 lakh and Rs.1443 lakh excluding the Interest During Construction(IDC). In terms of the Concession Agreement, the Appellant can use the power generated for captive consumption or can sell the same to the Gujarat Electricity Board or its successors. Accordingly, the appellant entered into a Power Purchase Agreement with the Respondent No.2 on 29.1.2008 and it agreed to sell the contacted capacity i.e. 3MW and 2.6 MW for a period of 35 years and the Respondent No.2 had agreed to purchase the power generated by the appellant at Rs.3.29 KWH for the year 2007-08 as the base rate which is subject to escalation of 3% @ till the commercial operation date and the tariff at the time of commercial operation date would be applicable for the entire project life. In the bid document as well as the Concession Agreement, the inter-connection point was at a distance of 4 Km. from the Generating Station and the DPR was also prepared on the basis of it. The Maintenance of the inter-connection facility was at the cost of the appellant and in terms of the tender document, the power was to be evacuated from the nearest erstwhile GEB 11 /66 KV sub-station at Rakholi in Dadar & Nagar Haveli. The sub-station at Rakholi was 4 kms. away from the switch yard of the appellant and the transmission line from the delivery point in the plant switch yard to the sub-station of GETCO was to be constructed at the cost of the appellant. The construction work commenced on 24.11.2007 and subsequently GETCO after conducting a system study for evacuation of the power informed the Appellant that power could no longer be evacuated from Rakholi as the distribution in the union territory was not under the erstwhile Gujarat Electricity Board. Accordingly, the appellant was directed to lay down a 66 KV (double circuit) transmission line for 23 kms. instead of 4 kms. passing through the union territory of Dadar & Nagar Haveli and the connecting to sub-station at Mota Ponda in Gujarat. The cost of construction of this line was estimated at 8.5 crore and it was borne by the appellant. The actual cost of construction came to Rs. 10 crore. In order to enable the commissioning of the project and evacuation of the power, the Appellant agreed to laid down the transmission line for 23 kms. and the Appellant had before it three options. The first option was that if GETCO would carry out the work, the cost would be Rs.644.64 lakh, if the Appellant would carry out the work, except the GETCO's end work; the cost would be Rs.168.20 lakh and if the Appellant would carry out the work, the cost would be Rs.97.76 lakh. The appellant exercised the third option in order to economise the work and it communicated to the GETCO by a letter dated 17.11.2008. In terms of the third option, given by GETCO to the Appellant, the works of laying down the transmission line and sub-station was carried out by the appellant under the supervision of GETCO for which the appellant was to pay the supervision charges of Rs.97,76,000/-. The Appellant requested the GETCO that it should be allowed to make the payment of supervision charges in four or five instalments as making payment at one go would cause hardship upon the Appellant. After receiving the consent of the GETCO, the Appellant submitted its drawings for approval. The appellant also signed an undertaking on 15.11.2008. By a letter dated 8.12.2008 the GETCO after deliberations allowed the appellant to make payments in four instalments. However, the appellant was belatedly informed by a letter dated 2.1.2009 that the appellant had to get purchase of the materials from the registered vendors of GETCO and get the works executed through M/S Cobra Instalaciones Y Services (India ) Private Ltd. In terms of the payment schedule provided to the appellant the appellant made payment of Rs 30 lakh on 6.1.2009 and the GETCO approve d the designs submitted by the appellant . On receiving the consent of the GETCO to the designs the appellant commenced the laying the transmission lines. Though the GETCO initially objected to the engagement of M/S Cobra Instalaciones it was subsequently granted registration as D class contractor by the GETCO on 13.5.2009.After tests the Independent Engineer issued the Completion Certificate in terms of the Concession agreement on 24.2.2010.

(3.) THE GETCO, the Respondent No.1 herein filed a counter-affidavit containing as follows:-