SC upholds Himachal's demand for 18% free electricity from JSW Hydro Energy's Karcham Wangtoo plant
Supreme Court
on Wednesday upheld the
Himachal Pradesh
government's demand for 18% free electricity supply from
JSW Hydro Energy
's 1,045-megawatt
Karcham Wangtoo
hydroelectric power plant in the state.
While setting aside the Himachal Pradesh High Court's order for allowing maximum 13% of free electricity to the state government, a bench of Justices P.S. Narasimha and Atul S. Chandurkar held that the CERC Regulations 2019 do not prohibit JSW from supplying free power beyond 13% to the State, and the Implementation Agreement does not stand overridden by the operation of these Regulations,' the top court said.
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'Once the Regulation does not prohibit the supply of free power beyond 13%, JSW cannot rely on it to wriggle out of its contractual obligations. Such an interpretation is necessary to recognise and enforce the generating company's freedom of contract, which includes its choice of business dealings,' the apex court said, adding that the Regulatory Commissions, APTEL, and the courts must enforce these contractual obligations and ensure that their interpretation of regulations does not allow the party to circumvent and breach its contractual undertakings when the same is not intended by the regulation itself.
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As per agreements executed between JSW Hydro and the Himachal Pradesh government, the former's plant was supposed to supply free power at 18% of the net generation for 28 years to the state after the completion of 12 years of commercial operations of the project that commenced in 2011. However, CERC (Terms and Conditions of Tariff) Regulations, 2019 capped the maximum free supply at 13% of the net generation on the ground that contractual agreements, to the extent that they are inconsistent with the applicable regulations, shall stand overridden by their operation.
The HC had accepted the CERC's findings and directed that the implementation agreement stood modified.
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Coming down of JSW for its contradictory positions, Justice Narasimha said that the company cannot be allowed to approbate and reprobate, or blow hot and cold at the same time to secure relief under the law.
'The regulator has the expertise, specialisation, and institutional memory to conduct such an interpretative exercise to further the objective of the regulatory regime and systematically lay down legal principles. In this light, the High Court should not have entered into the domain of interpreting these Regulations which deal with tariff determination, as the same falls within the exclusive domain of the CERC,' the SC said.
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