1 We have heard Shri Rakesh Khanna, learned senior
counsel appearing for the appellants for quite some time,
and Shri. Gurukrishna Kumar, learned senior counsel
appearing for the respondent in reply. Though Shri Rakesh
Khanna has taken us through the PPA, various documents,
and various orders in great detail, we do not find it
necessary to go into any of these for the reason that we find that the JUDGMENTappellants had set up various expert
committees to go into the bone of contention in this
appeal, namely, project cost and completed cost.
2 We find that M/s. K.P.C.L (M/s. Karnataka Power
Corporation Ltd.) had been appointed by them in order to
determine the project cost which was determined at
Rs.73.40 crores. M/s. Tamil Nadu Electricity Generation
and Distribution Corporation Ltd. (TANGEDCO), another
expert, arrived at a finding of Rs. 82.11 crores, which
was reconfirmed by a subsequent report, and ultimately
arrived at a figure of Rs.79.439 crores with other issues
which were to be decided separately. A joint exercise
between the appellants and respondent, also carried out
in April, 2010, where a figure of Rs. 76.14 crores was
arrived at, and the balance of Rs. 8.82 crores in respect
of IDC, that is, interest during construction and
preliminary expenses was left to be examined by the
Central Electricity Authority. The Central Electricity
Authority also came out with three separate reports in
which it arrived at certain figures of project cost.
Finally, the administration appointed a five member
committee after all these reports, and in 2013, this five
member committee ultimately arrived at Rs.70.61 crores as
the final project cost. This was as follows :
“ Description of items Quantum of Para Ref. of
Expenditur Committee
e Rs. Report
Crores Approved Cost 63.14 15,17,29&30 IDC (-) 3.00 Cost excluding IDc (+) 60.14 Increase in cost of (+) 3.30 17 Establishment due to extended gestation period Increase due to Exchange (+) 5.67 Allowed as per Rate variation actual considering only 5.13 utilization
MUS$ Rs.11.0445 per dollar Additional Transformer (+) 0.31 22 and Black Start DG Set-Work done after COD Hard Cost excl. IDC 69.42 Proportionate IDC on the (+) 4.91 Revised on hard hard cost of Rs.69.11 Cr. cost Completed cost including 74.33 IDC/Project cost Liquidated damage @ 5% on (-) 3.72 Rs.74.33 crores Project Completed Cost 70.61
3 Subsequently, it has been stated that the said
report of the five member committee has been accepted by
the Administration. The Respondent had prayed that the
Hon'ble Commission determine the project cost and tariff
thereon in accordance with the provisions of PPA/Techno
Economic Clearance issued by A&N Administration and the
report of the five members committee constituted by the A
& N Administration for the purpose of determination of
the cost of the project as Rs. 70.61 crores.
JUDGMENT 4 When we pointedly referred to these reports and the
figures contained therein, together with the fact that
the respondent itself accepted the five member committee
report, which is then placed before the commission for
acceptance, we find it a little difficult to now allow
the respondent to go behind the said report. None of the
expert committee reports allow certain amounts to be
deducted from the project cost which would, if the
appellants were to succeed before us, amount to a figure
of Rs. 18.25 crores as is now argued before us by the
appellants. Even the five member committee report,
accepted by the Administration, does not include any
figures to be minused on account of under utilization of
foreign currency component of Rs. 4.149 crores;
custom-duty concession of Rs. 2.80 crores; concession in
Land Registration Charges availed by the respondent
amounting to Rs.0.3234 crores; and cost for start-up fuel
and LUBE oil for trial and test run amounting to
Rs.0.1971 crores.
5. Shri Khanna took us through the memo of appeal filed
before the Appellate Tribunal and referred specifically
to ground (C) and question of law 8(b)1 which read as
follows:
“The JERC has relied upon the reports of the
`experts' which are contrary to the PPA. JERC has
erred in giving foreign exchange variation on 7.96
MUSD. Documents submitted by the respondent
clearly show that the respondent had utilised only 9472653 DEM JUDGMENT(equivalent to 5.13 MUSD) as foreign
currency for the purpose of importing the
equipment which is mandated by the PPA.
“8(b)1. Whether the JERC has not erred by
following recommendations/reports which are in
contravention of the provisions of PPA for
computation of completed cost.”
6. We are afraid that these grounds do not help the
appellants' case. Nowhere has it been stated, in any of
the grounds that the statement made by the commission
that the five member committee report had been accepted
by the Administration is said to be incorrect. On the
contrary, the ground sought to be raised in the appeal
is that the commission has relied upon these reports,
which reports are contrary to the Power Project
Agreement. We are thus of the opinion that none of
these aspects can be looked into by us in the present
appeal. However, we find that the appellants are on
solid ground when they contend that an increase in
interest during construction, financing charges and
incidental expenses incurred for the delay in the
execution of the project due to reasons beyond the
control of the respondent has been allowed in appeal by
the Appellate Tribunal at para 23 and 36 suo moto.
7. Shri Rakesh Khanna has argued before us and shown us
the ground taken in the present appeal that the tribunal
has directed a suo moto payment of additional IDC,
financing cost and incidental expenses during JUDGMENT construction even though this was not part of the appeal
filed by the appellant M/s. Suryachakra Power
Corporation Limited before the Tribunal. This is sought
to be answered by the respondent in its counter
affidavit in this Court in paragraph (F) which reads as
under:
“In the synopsis the appellant has sought to
contend that the Tribunal has suo-moto directed
payment of additional interest during construction
(IDC), financing cost (FC) and incidental expenses
during construction (IEDC) for the period of delay
in achieving commercial operation. The appellants
have also sought to contend that the said issue
regarding additional IDC, FC and IEDC was not a
part of the appeal filed before the Tribunal. In
this context, it is respectfully submitted that the
said contention of the appellants is incorrect and
misleading. It is respectfully submitted that the
issue regarding the delay in achieving commercial
operation and to whom was the delay attributable
was pleaded and considered in detail by both the
Joint Electricity Regulatory Commission as well as
the Tribunal. Additional IDC, FC and IEDC are only
consequences that follow the delay in achieving the
commercial operation. Both the Courts below have
concurrently held that the delay in achieving
commercial operation of more than a year was
attributable to the appellants themselves as they
did not provide the transmission lines to evacuate
the power from the project within the time
prescribed under the PPA. Therefore the
Respondents herein had claimed deemed generation
charges for the whole period of delay in achieving
commercial operation. It is pertinent to mention
that the deemed generation charges is higher than
the additional IDC, FC and IEDC. Thus, the
Tribunal has granted the Respondents the lower of
the two. The deemed generation charges have been
awarded only for a period of four months out of the
total delay of more than a year in achieving
commercial operation. The Respondent is not
claiming additional IDC, FC and IEDC for the said
period of four months for which deemed generation
charges have been granted.” 8. In reply, JUDGMENTShri Gurukrishna Kumar, learned senior
counsel appearing for the respondent, points out before
us that in any case what was referred to in the
commission's judgment in order to arrive at the figure
of Rs. 78.29 crores as the project cost in fact started
with the figure of Rs. 77.595 crores, being CEA approval
as per “funds tied up” basis, which according to the
learned senior counsel, would include the aforesaid
expenditure. He argued before us that certain figures
which were referred to and relied upon by the CEA to
arrive at this figure specifically included the
aforesaid. We were not shown any such figures. We,
therefore, allow the appeal only to this limited extent
and set aside the judgment of the Appellate Tribunal
insofar as it allows an increase in interest during
construction (IDC), financing charges (FC) and
incidental expenses during construction (IEDC) incurred
for the delay in execution of the project for reasons
beyond the control of the respondent. To this limited
extent alone the appeal stands allowed, and on other
points it is dismissed.
9 We are also of the view that apart from the above,
no substantial question of law is raised in this appeal.
10 For the aforesaid reasons, we dispose of the appeal
with no other costs. JUDGMENT