M/s Bhoruka Power Corporation Limited vs Haryana Electricity Regulatory Commission & Ors

Judgement in Appeal No. 55 of 2016
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL NO. 55 OF 2016
th
Dated: 30 OCTOBER, 2026
Present: Hon`ble Ms. Seema Gupta, Officiating Chairperson
Hon`ble Mr. Virender Bhat, Judicial Member
IN THE MATTER OF:
M/s Bhoruka Power Corporation Limited,
Through its Authorized Signatory,
No.48, Lavelle Road,
Bangalore-560 001 Appellant
Versus
1. Haryana Electricity Regulatory Commission
Through its Secretary,
Bay 33-36, Sector 4,
Panchkula-134112
Haryana
2. Haryana Power Purchase Centre,
Shakti Bhavan, Sector 6,
Panchkula-134102.
3. Irrigation Department, Haryana,
Sinchal Bhavan, Sector-5,
Panchkula-134114
4. Haryana Renewable Energy Development Agency,
Sector-17,
Panchkula-134109
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Judgement in Appeal No. 55 of 2016
5. Sahab Singh
Village Harewa,
District Yamunanagar-135001. - Respondent(s)
Counsel on record for the Appellant(s) : Mr. Alok Shankar
Mr. Spandan Biswal
Mr. Aman Goyal
Mr. Ritik Raj
Mr. Satyajit Sarna
Mr. Sudev Singh Juneja
Mr. Shivendra Pandey
Mr. Rukman Banka for App. 1
Counsel on record for the Respondent(s) Mr. Amarjeet Singh for Res.1
Mr. Aditya Singh
Mr. Raghujeet Singh Madan
Ms. Sonia Madan
Mr. Nitin Goyal
Mr. Aditya Singh
Ms. Aditi Lakhanpal
Ms. Ayushi Garg
for Res. 2
JUDGEMENT
PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON
1. The present Appeal has been preferred by M/s Bhoruka Power Corporation
Limited challenging the Order dated 18.12.2015 passed by the Haryana
Electricity Regulatory Commission (“HERC” or “Commission”) in Case No.
HERC/PRO-59 of 2014, whereby the Appellant’s petition seeking re-
determination of tariff in respect of its 6 MW Small Hydel Power Project at
Dadupur, Yamuna Nagar, Haryana (“Project”) due to non-availability of Full
Supply Level (FSL in short) of 916 ft, came to be rejected.
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Judgement in Appeal No. 55 of 2016
Description of Parties :-
2. The Appellant - M/s Bhoruka Power Corporation Limited (“BPCL”) is a
Generating company in terms of Section 2(28) of the Electricity Act and has set
up a 4x1.5 MW Small Hydro Power Plant in Yamuna Nagar District of Haryana in
the year 2010 ("Project" ).
3. The Respondent No. 1- The Haryana Electricity Regulatory Commission is
the State Regulatory Commission for the state of Haryana and exercising
powers vested under Section 86 of the Electricity Act, 2003.
4. The Respondent No. 2-Haryana Power Purchase Centre ("HPPC) is a joint
forum of Uttar Haryana Bijli Vitran Nigam Limited (“UHBVNL”) and Dakshin
Haryana Bijli Vitran Nigam Limited (“DHBVNL”) for procurement of power on
behalf of the these State Distribution Licensees.
5. The Respondent No. 3, is the Irrigation Department, Government of
Haryana, the department of State Government responsible for the administration
and management of irrigation works in the State of Haryana.
6. The Respondent No. 4, Haryana Renewable Energy Development Agency
("HAREDA") is an agency of the Government of Haryana functioning as the
nodal agency for implementation of various renewable energy schemes and
projects in the State. The Respondent No. 5, Sh. Sahab Singh, is private
Respondent residing at Village Harewa, Tehsil Chhachhroli who had moved an
application before the Haryana Commission for being impleaded as a necessary
party to defend his interest and those of affected farmers of nearby villages. The
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Judgement in Appeal No. 55 of 2016
Haryana Commission impleaded him as a necessary party by order dated
07.01.2015.
Facts of the case
7. On 07.06.1999, a tripartite Memorandum of Understanding (“MoU”) was
executed between HAREDA, the Irrigation Department, Government of Haryana,
and the Appellant ( BPCL) for development of a 4 MW Small Hydro Project at
Dadupur, Western Yamuna Canal (Lower). Subsequent to MoU, in 2002, BPCL
prepared and submitted the Detailed Project Report ( “DPR”) for setting up of 6
MW of small hydro project at the site and it was approved by HAREDA on
18.04.2003.
8. On 27.12.2006, the HPGCL submitted the PPA, for approval of State
Commission. The State Commission, vide its Order dated 10.07.2007, approved
the PPA and approved the Tariff for the project based on Project cost of Rs
3259.52 lakhs as per DPR of 2006. The tariff was determined at Rs.2.80 per
unit for the first 12 years and Rs.1.70 per unit for years 13 to 15, from the date of
commissioning. On 03.03.2008 Appellant and UHBVN signed the PPA.
9. The Project was commissioned on 19.03.2010. It is the case of Appellant
that after commissioning of the Project, FSL of 916 ft. could not be maintained
on account of seepage and waterlogging affecting adjoining agricultural land and
crops. Consequently, the pond level was maintained at a lower level. The issue
was considered by the Irrigation Department and other concerned authorities and
various measures were examined for addressing the seepage problem.
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Judgement in Appeal No. 55 of 2016
10. Prior to commissioning, on 17.03.2010, the Appellant had approached the
Commission seeking re-determination of tariff on account of increase in the
Project cost and additional works undertaken for the Project. The Commission,
vide Order dated 08.09.2010, revised the project tariff to Rs.3.18 per unit for the
first 12 years and Rs.1.93 per unit for the 13th to 15th years. The said Order was
challenged before this Tribunal in Appeal No.78 of 2011, however this Tribunal
vide its order dated 27.04.2012 disposed of the Appeal No. 78 of 2011 and inter
alia, held that the original tariff had not been determined under Section 63 of the
Electricity Act, 2003 and that the Commission was empowered under Section 62
of the Act and the applicable Regulations to re-determine the tariff.
11. The Appellant represented to the Irrigation Department and HAREDA that
the Project had been designed on the basis of an FSL of 916 ft. and that operation
at a lower FSL was resulting in substantial reduction in generation. However
same could not be resolved.
12. Appellant then filed Case No. HERC/PRO-59 of 2014 before the
Commission seeking re-determination of tariff applicable to the Project on the
basis of the realistic FSL available at Dadupur Pond and consequential revision
of tariff from the date of commissioning. The State Commission, vide the
Impugned Order dated 18.12.2015, dismissed the said petition. Aggrieved by the
aforesaid Order, the Appellant has preferred the present Appeal.
SUBMISSIONS URGED ON BEHALF OF APPELLANT
13. The issue in the present case arises from the Irrigation Department’s
inability to maintain the pondage at the FSL of 916 ft., which, as per Clause 8 of
the MoU, was the Government’s undertaking to enable sustainable power
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Judgement in Appeal No. 55 of 2016
generation and was not an independent obligation of BPCL. Tariff determinations
were premised on the availability of the said FSL, as the DPR’s estimated annual
generation of 31.5 MU formed the basis of the tariff approved in 2007, while the
additional capital cost approved in 2010 was intended to enable BPCL to
“maintain a PLF/CUF of 56%”. Further, HAREDA and the Respondent No.3
repeatedly affirmed FSL of 916 ft. as the agreed project parameter in their
subsequent correspondence, including BPCL’s letter dated 15.12.2010 and the
joint inspection culminating in the Irrigation Department’s letter dated 16.03.2011.
However, at the review meeting dated 24.07.2013, the Engineer-in-Chief,
Irrigation Department, while acknowledging that “the Dadupur Pond has been
designed for FSL of 916 ft.”, stated that “FSL at 916 ft. cannot be allowed”,
whereupon the Appellant requested that this position be communicated in writing
to enable it to approach HERC. It was this refusal, and not any default on the part
of the Appellant, that led to the filing of Petition on 17.11.2014 before the
commission and, thereafter, the present Appeal.
14. It is further submitted that the shortfall in generation is not attributable to
any obligation or deficiency on the part of BPCL, but is a direct consequence of
the Government’s refusal to honour its undertaking under Clause 8 of the MoU.
The Appellant’s own reciprocal obligation under Clause 21 was confined to
making alternate arrangements for uninterrupted water flow and strengthening
the banks in the vicinity of the Project, an obligation it exceeded by constructing,
at its own cost, a new gated regulator and renovating the Additional Head
Regulator gates, expressly to enable it “to maintain the required F.S.L. pond level
of 916.0 ft.”. Further, WAPCOS’s report, commissioned by the Irrigation
Department, traced seepage predominantly to causes “essentially unrelated to
the Canal”, while acknowledging that canal seepage falls within the State’s
domain; thus, no deficiency on the Appellant’s part is established on record.
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Judgement in Appeal No. 55 of 2016
Further, the only risk undertaken by the Appellant under Clause 19 of the MoU
was that of seasonal variations in hydrological data and discharge patterns, i.e.,
variations in the quantum of water flowing through the canal from season to
season, which cannot be construed as an assumption of risk arising from a
reduction in FSL or storage level, a structural parameter of the pond within the
Irrigation Department’s control and conceptually distinct from seasonal discharge
variations. It is submitted that ‘Head’, as identified in the Notice, is the difference
between the Head Race Level and the Tail Race Level, and power generation
varies directly with Head and Discharge; consequently, when the Irrigation
Department fails to maintain pondage at the FSL, the Head Race Level falls,
resulting in a corresponding reduction in Head and generation below the
designed capacity. This direct physical relationship is illustrated by the fact that
HPGCL, operating on the same canal with a greater Head, achieves
correspondingly higher generation capacity. Since the tariff was determined on
the presumption that pondage would be maintained up to the FSL of 916 ft., its
non-maintenance necessitates redetermination of the tariff on the basis of the
realistic storage level actually available, namely, 912–913 ft.
15. HERC’s order dated 10.07.2007 expressly stipulated that the tariff would
“continue to be in force till such time it is reviewed and approved by the
Commission”, thereby envisaging its review and redetermination. The revisable
nature of the tariff under Section 62, the requirement to determine the final tariff
on the basis of the actual cost of the completed project, and HERC’s power to
review the tariff during the tariff period were affirmed by this Tribunal in UHBVNL
v. HERC , Appeal No. 78 of 2011, decided on 27.04.2012 . A conjoint reading of
the PPA and the two tariff orders establishes that the tariff was fixed for a period
of 15 years and must be considered in light of the project parameters on which it
was determined.
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16. It is further submitted that the finding in the Impugned Order that the Project
was “ill-conceived” is contrary to the material on record. The project parameters,
including the site, Head, Discharge and FSL, were determined and repeatedly
reaffirmed by the Government’s own instrumentalities, beginning with the
Haryana State Electricity Board’s scheme in the mid-1970s and the Central
Electricity Authority’s clearance dated 16.11.1981, followed by the Chief
Engineer’s approval of the FSL of 916 ft. on 20.11.2006. Significantly, the
Impugned Order itself records that, as early as 2003, the Technical Evaluation
Committee had noted that the existing head regulator gate could attain only 914.8
ft., as against the “maximum designed pond level” of 916 ft., and had
recommended remodelling “for attaining a head of 916 ft.…”, thus, the deficiency
in the Government’s infrastructure was known to the authorities before approval
of the DPR and execution of the PPA and cannot be attributed to the Appellant.
17. This Tribunal, in Greenyana Solar (P) Ltd. v. HERC, Appeal No. 302 of
2024, decided on 23.04.2025 ( paras 15–16), held that project-specific tariff
redetermination under Section 62 is tailored to the economic and operational
realities of the project and reflects the actual costs incurred, subject to prudence
check. Further, in Patikari Power Ltd. v. HPERC, APTEL Appeal No. 179 of
2010, decided on 23.04.2012 (paras 36 and 45(ii)), this Tribunal redetermined
the tariff where the hydrology provided by the State’s own entities fell short of the
envisaged parameters, holding that such circumstances amounted to a change
in the basic parameters, dependent on natural conditions and beyond the
appellant’s control. The present case stands on an equal, if not stronger, footing,
as the FSL of 916 ft. was represented and envisaged by the Government’s own
instrumentalities, but was subsequently not maintained by them, resulting in a
change in the basic project parameters beyond the Appellant’s control.
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Judgement in Appeal No. 55 of 2016
Accordingly, the Appeal deserves to be allowed and the tariff redetermined on the
basis of the realistic FSL and storage level actually available at Dadupur Pond,
in accordance with Regulation 29 of the HERC RE Tariff Regulations, 2010, and
the principles laid down in Greenyana Solar and Patikari Power.
SUBMISSIONS URGED ON BEHALF OF RESPONDENT NO.2 (HPPC)
18. It is submitted that the dispute concerning the maintenance of the FSL is
essentially inter se the Appellant and Respondent No. 3 (Irrigation Department),
as any assurance regarding the FSL arises, if at all, from the MoU dated
07.06.1999, to which Respondent No.2 is not a party. The PPA dated 03.03.2008
neither stipulates any FSL requirement nor imposes any obligation upon
Respondent No.2 in respect of the pond level. Further, the Force Majeure clause
(Clause 6.1) does not cover inadequate FSL, and no notice under Clause 6.1(b)
was issued by the Appellant. Moreover, Clause 2(ii) of the PPA expressly
absolves Respondent No.2 of any expenditure incidental to the remodeling of
existing structures. Accordingly, the consequences of a dispute between the
Appellant and Respondent No. 3 cannot be imposed upon HPPC or passed on
to the consumers of Haryana by way of tariff redetermination.
19. It is submitted that, under Clauses 3, 5, 8, 19 and 21 of the MoU, the
Appellant was responsible for conducting further investigations, assessing
hydrological data and project feasibility, and strengthening the canal banks and
related structures at its own cost. The DPR also mandated thorough site
investigation. Despite the Project capacity being increased from 4 MW to 6 MW,
the Appellant failed to adequately assess the feasibility of maintaining the FSL at
916 ft. The Impugned Order records that the DPR underwent revisions in 2006–
07 without examining the FSL and site suitability for the 6 MW Project, that the
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Judgement in Appeal No. 55 of 2016
Appellant proceeded on the assumption of an FSL of 916 ft. without adequate
financial prudence or risk assessment, that the causes subsequently identified by
WAPCOS ought to have been ascertained at the inception stage, and that the
Appellant’s failure to strengthen the banks aggravated seepage. Respondent No.
3 and HAREDA consistently raised these objections, whereas the Appellant
offered only a general denial. The correspondence further demonstrates that the
Appellant was aware of the issue, proposed remedial measures of its own, and
that Respondent No. 3 relied upon its assessment; however, the measures
proved inadequate, and the WAPCOS-recommended measures were not
undertaken due to “apprehensions”. Significantly, all such correspondence was
exchanged with Respondent No. 3 and HAREDA, and Respondent No.2 was
never informed of the issue. The Appellant did not dispute the WAPCOS findings,
except with regard to the cost and time involved. Moreover, the remedies
recommended by WAPCOS, namely canal lining costing Rs 33.51 crore and an
X-regulator costing Rs 5.25 crore, pertain to canal works falling within the domain
of the Appellant and Respondent No. 3, and not the purchaser. The Impugned
Order considers all relevant clauses, correspondence and the conduct of the
parties, is well reasoned, and calls for no interference.
20. It is submitted that the issue of FSL was never raised by the Appellant in its
first petition dated 17.03.2010, and the order dated 08.09.2010, which also
recorded the Appellant’s failure to survey and reassess the additional work
required, was never challenged by it. Despite the availability of full-year
generation data for FY 2010–11 (12.93 MUs), the Appellant raised no such issue
before any forum, except through correspondence with Respondent No. 3 and
HAREDA , and even accepted an interim FSL of 912.8–913.4 ft. The Appellant
had already benefited from tariff redetermination on the basis of the completed
project cost, whereby the tariff was enhanced from Rs 2.80 to Rs 3.18 per unit, a
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Judgement in Appeal No. 55 of 2016
determination upheld by this Tribunal as being based on actual cost, while HERC
allowed approximately Rs 4 crore out of the claimed Rs 8.25 crore for reasons
duly recorded. The subsequent filing of Petition No. 59 of 2014 on 17.11.2014 is
therefore an afterthought. Having accepted and acted upon the order dated
08.09.2010, which attained finality and was upheld in Appeal No. 78 of 2011, the
Appellant is estopped from reopening the issue, which is also barred by the
principle of res judicata, as recognised in GUVNL v. GERC, Appeal No. 279 of
2013, decided on 22.08.2014
21. It is contended that the present case is squarely covered by Puri Oil Mills
Ltd. v. HPPC, Appeal No. 90 of 2013 , decided on 09.04.2014 (J-1), wherein this
Tribunal, in similar circumstances involving a canal-based project, held that
strengthening the canal banks was the developer’s responsibility, that adequate
time was available for due diligence, and that there was no valid ground to reopen
the PPA or award compensation for loss of generation. Further, the Hon’ble
Supreme Court, in HPPC v. Sasan Power Ltd., 2023 SC 42, decided on
06.04.2023 held that a bidder who fails to verify the relevant position “acted at his
own peril” and that a Commission “cannot rewrite a contract solemnly entered
into” or exercise regulatory powers contrary to its express terms. The sanctity of
the PPA and the impermissibility of altering the agreed tariff to the prejudice of
consumers have likewise been affirmed in GUVNL v. Solar Semiconductor
Power Co., CA No. 6399 of 2016, decided on 25.10.2017 ; GUVNL v. EMCO
Ltd., (2016) 11 SCC 182 ; and TRANSCO v. Sai Renewable Power, (2011) 11
SCC 34, para 86. The Appellant’s reliance on GUVNL v. Tarini Infrastructure,
(2016) 8 SCC 743 , is distinguishable, as that case involved a factual mistake
regarding the evacuation point, which increased the distance from 4 km to 23 km
and resulted in an unforeseen expenditure of Rs 10 crore. No comparable
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Judgement in Appeal No. 55 of 2016
supervening event exists in the present case, and a defect inherent at the
inception of the Project cannot be treated as a Force Majeure event.
22. It is submitted that even assuming that the Appellant could not have
foreseen the alleged difficulties despite due diligence, any liability arising from the
assurance regarding the FSL would lie with Respondent No. 3 (Irrigation
Department) and would be governed by the terms of the MoU. The failure to
maintain the designed FSL cannot, therefore, constitute a ground for
redetermination of tariff at the expense of HPPC and the consumers. The
Appellant’s remedy, if any, lies against Respondent No. 3 under the MoU, and
Respondent No.2 cannot be held liable for either the Appellant’s alleged lack of
prudence or any default on the part of Respondent No. 3. Without prejudice, it is
further submitted that, since the Appellant approached HERC only on 17.11.2014,
no relief, if otherwise admissible, can be granted for any period prior thereto.
23. It is further submitted that IA No. 1932 of 2026, seeking to place seven
documents on record under Rule 30, along with an open-ended liberty to file
further documents, deserves dismissal. All documents pre-date the Impugned
Order and the Appeal, yet the Appellant has failed to explain why they could not
be produced earlier despite due diligence. The IA has been filed after conclusion
of hearings, following the query raised by this Tribunal on 14.08.2026 regarding
the basis of FSL 916 ft., without affording HPPC an opportunity to address the
submissions orally. The Appellant has already supplemented the record through
IA No. 641 of 2017. Further, IA/A-2, IA/A-3 and IA/A-5 are already on record as
while IA/A-6 is cumulative. The open-ended prayer for filing further documents is
also impermissible. Without prejudice, the documents do not advance the
Appellant’s case, as HPPC is neither a party to them nor is FSL stipulated in the
PPA. Rather, IA/A-1 (Technical Evaluation Committee report dated 14.02.2003)
identified the mismatch between FSL 916 ft. and the head regulator level of
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Judgement in Appeal No. 55 of 2016
914.28 ft., leakage, deficiencies in the Appellant’s assumptions and the need for
remodeling at its cost, thereby highlighting risks known at the inception. IA/A-4
dated 09.03.2010 places responsibility for damage and leakage upon the
Appellant while maintaining the maximum pond level. IA/A-6, being HAREDA’s
letter dated 27.11.2013, merely requests Respondent No. 3 to confirm the FSL in
writing, records no decision or tariff commitment, and indicates that the Appellant
itself acknowledged by 2013 that FSL of 916 ft. could not be maintained due to
seepage. IA/A-7 dated 30.12.2014 records that responsibility for seepage lies
with the Appellant under Clause 8 and attributes the same to its failure to
strengthen the banks, thereby corroborating HERC’s findings. The material
question is not merely whether 916 ft. was the designed FSL, but whether this
gives rise to any liability on the part of HPPC or warrants tariff redetermination
against it, which the documents do not establish. Accordingly, IA No. 1932 of 2026
deserves dismissal; alternatively, if any document is taken on record, reasons
may be recorded, the Appellant be required to prove its authenticity and contents,
and the document be considered in its entirety, including the portions adverse to
the Appellant.
ANALYSIS AND DISCUSSION
24. We have heard Mr. Alok Shankar, learned counsel appearing on behalf of
the Appellant, Mr. Aditya Singh, learned counsel for the Respondent No.2, and
perused written submissions, Impugned Order and other material on record. The
issue arising for consideration in the present Appeal is essentially with regard to
the Appellant’s claim for re-determination of tariff on account of non-availability of
FSL of 916 ft., on the basis of which the Project had been designed, and the
consequential impact of the reduced FSL upon generation and financial viability
of the Project. To effectively adjudicate the issue, it is of relevance to consider the
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Judgement in Appeal No. 55 of 2016
entire sequence of events with regard to conceptualization of project and tariff
determination for the project.
25. A Memorandum of Understanding MOU dated 07.06.1999 was signed
between the Appellant and Haryana Renewable Energy Development Agency
(HAREDA) for implementation of hydel project at Dadupur Western Yamuna
Canal. The said MOU was executed in pursuance of Govt. of Haryana notification
dated 08.01.1998, whereby private investors were invited for setting up of
mini/micro hydel projects on Build Operate and Own ( BOO) basis in Yamuna
Nagar with an envisaged capacity of about 4MW capacity. Under the terms of
the MOU, HAREDA was to discontinue all activities relating to investigation and
preparatory works of the project upon execution of the MOU. The responsibility
for carrying out further investigation and preparation of the Detailed Project
Report (DPR) was cast upon the Appellant. The relevant clauses of the MOU,
which delineate the respective obligations of the parties, are extracted herein
below for ready reference:
“1.The Company is desirous of implementing, and have submitted its
proposal to HAREDA for investigation and implementation of, the proposed
4000 KW Small Hydel Project at Dadupur Western Yamuna Canal (Lower),
Yamuna Nagar District of Haryana, hereinafter, referred to as the Project.
……..
3.Save as otherwise provided hereinafter, HAREDA will stop all activities,
if any being done on investigations and other works of the project with the
signing of this MoU and the responsibility for carrying out further
works/investigations, thereafter, shall be that of the Company.
……..
5.HAREDA agree to provide the Company, copies of all available
documents, data, information reports relating to the project including
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copies of all investigations and studies, if any, carried out since mooting
the concept of the project.
……..
8.The Government shall allow pondage to be created in the upstream to
the Full Supply Level (FSL) or allowable free board level for sustainable
power generation purposes. adequately strengthened by the Company to
the satisfaction of the Government. In such cases canal banks in the
upstream shall be adequately strengthened by the Company to the
satisfaction of the Government.
……..
15.The Company shall submit a Detailed Project Report to HAREDA within
4 months from the date of signing of MoU or within extension in time given
by HAREDA. If extension in time is denied by HAREDA or the Company is
unable to submit a DPR within the said time limit the MoU will be rescinded
and processing fee deposited by the Company with HAREDA forfeited.
………
19. The Company shall have no right to claim any compensation from
HAREDA or any other developer for exploitation of potential upstream or
downstream of the site allotted to him, Company shall satisfy themselves
with hydrological datas and pattern of discharge which vary according to
irrigational requirements in canals and distributories. Considering these
parameters, Company may structure the power plants at their own risk.
HAREDA or the Government shall in no way be …..
21. Company shall make alternate arrangements for uninterrupted flow of
water in canal systems and also provide controlling mechanism,
strengthening the structure including the banks in upstream at their own
cost and to the entire satisfaction of the Government.
22. The Company agree that they shall carry out the investigations as well
as the implementation of the project keeping in view all stipulated quality
control measures as well as safety standards and the physical as well as
financial parameters (with particular reference to the quantities of various
items of the approved Detailed Project Report). The Company shall allow
access to the authorised representative(s) of HAREDA to all the locations
of the project to ensure compliance in this respect.”
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26. It is evident from the terms of MOU dated 07.06.1999, that the Appellant
can create pondage upstream of FSL for sustainable power generation, however
it would be the responsibility of the Appellant to strengthen the canal banks
upstream. Clause 19 of the MOU, further stipulates that Appellant was required
to satisfy itself with the hydrological data and pattern of discharge and only upon
such consideration these parameters, it may structure the plant at its own risk.
27. In pursuance of the MoU, the Appellant prepared a Detailed Project Report
(DPR) for setting up of 6 MW Project ( 4x1.5 MW) in departure from the originally
envisaged 4 MW capacity plant under the MOU and Govt. of Haryana notification
dated 08.01.1998 . The DPR records that the requisite studies and surveys, as
mandated under the Central Electricity Authority (CEA) checklist, were either
undertaken afresh or based upon earlier survey drawings. The DPR enumerates
various surveys and investigations, including topographical surveys, hydrological
surveys, and sub-surface investigations, which were relied upon for finalizing the
project parameters. The DPR also note that with respect to Dadupur Pond, the
Full supply level could not be achieved earlier due to heavy leakage. However, it
records that a new Barrage had since been completed with 22 bays of 25 ft each,
thereby addressing the earlier deficiencies.
28. After taking note of earlier attempts made for power generation, which could
not fructify for one reason to another, it is mentioned in the DPR that Appellant
has undertaken fresh studies with detailed investigation to formulate a fresh
proposal for harnessing the Western Yamuna Canal Main Line lower discharge
for Power Generation and the Appellant has been able to formulate most
economically viable proposal for power development at this place. In the DPR,
after considering actual flow data available for 10 years from 1992-2001, Energy
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Judgement in Appeal No. 55 of 2016
available from 1992 to 2001, the 31.5 MUs of energy was estimated considering
90 % dependable year. Accordingly, Appellant has decided to set up 6 MW of
plant and proposed that about 31.5 MUs, including auxiliary consumption of
energy could be generated from 6 MW installation at full plant availability. After
considering downtime of 4 % on account of planned plant maintenance and 3.5
% on account of Grid failures, the net export energy was arrived at 28.54 MU and
it also mentions that PLF of 59.95% appears well with the 3 Nos of Upstream
power houses located in the same canal. With these parameters, the project cost
was indicated as Rs 4991.78 lacs and cost of generation as Rs 2.08 per unit in
first year.
29. It is thus manifest from the DPR that Appellant has carried out requisite
studies and finalized the project design, parameters and size of the project
including the design energy or PLF of 59.95 %.
30. HAREDA vide its letter dated 18.04.2003 approved the DPR subject to
certain conditions and it specifically mentioned that initially the potential of the
site was estimated as 4 MW ( performance security charges deposited
accordingly), which was later revised to 6 MW based on detailed Hydrological
studies, besides depositing balance performance security charges, any
remodeling of the existing structure of Irrigation department incidental to the
installation of the project shall be at their cost.
31. Subsequently, State Commission vide its order dated 10.07.2007,
approved the Power Purchase Agreement (PPA) forwarded by HPGCL, subject
to certain modifications and determined the tariff payable for the project as Rs
2.80 / unit for 1-12 years and Rs 1.70 / unit for 13-15 years. Incorporating the
modifications so approved, PPA was signed between the Appellant and UHBVNL
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on 03.03.2008. Article 2 obligates the UHBVNL to purchase energy generated
from the project save and except in circumstances of system constraints or force
majeure. Further, under Article 7 of the PPA, in case of nonpayment of charges
for continuous period of two months by UHBVNL, Appellant is also entitled to sell
energy to third parties.
32. It is thus evident from the PPA, that under normal circumstances, UHBVNL
was obligated to purchase the energy from the Appellant’s project, and tariff
payable for such energy up to a period of fifteen years was expressly agreed
therein. Article 3 of the PPA further stipulates that after expiry of initial 15 years
terms, the tariff shall be subject to review by State Commission and in case
UHBVNL declines to purchase power beyond the said period, the Appellant shall
be permitted to sell the energy to third parties. Accordingly, under the contractual
framework of the PPA, the Respondent-Discom was bound to pay for the energy
received from the Appellant’s project at the tariff so agreed and approved by the
State Commission.
33. Perusal of the documents also reveal that the Appellant, after realizing the
non-achieving of FSL of 916 Ft, vide its letter dated 06.08.2008 addressed to
Hathnikund Barrage Circle (HBC) Irrigation department sought their approval for
renovation of Additional Head Regulatory Gates, at their own cost, which are
leaking profusely and stated that renovation will help them maintain FSL level of
916 ft of Dadupur Pondage. Approval for same was granted by HBC, Irrigation
department vide letter dated 21.08.2008. It is understood from the record that
the said work was completed and thereafter vide its letter dated June 05, 2009
Appellant handed over the control of Additional Head Regulator gates to Water
Service Division, Dadupur for their operational control.
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34. The Appellant thereafter filed a petition in the year 2010 before the State
Commission, seeking increase in the project cost on various accounts including
expenditure incurred on repair of barrage gate works and repair of existing gates
undertaken to maintain FSL of 916 feet and prayed for re-determination of tariff.
It is an admitted position that hydro project was commissioned in March 2010,
prior to passing of the order in which tariff was re-determined. It is relevant to note
that Appellant’s plant was already in operation at this time and the Appellant was
necessarily aware about the actual energy being generated from the project. The
Appellant, however, confined its submissions to the necessity of the additional
works for maintaining the FSL of 916 Ft, and did not seek revision of design
energy on account of non-maintenance of FSL at the said level.
35. The State Commission in its order dated 08.09.2010, deliberated in detail
the various additional expenditure claims of Appellant and specifically allowed
expenditure on barrage gate and repair of existing gates, holding that such works
were necessary to enable petitioner (i.e. Appellant herein ) to maintain PLF/CUF
of 56 %, though the UHBVN has disputed the additional claims of Appellant post
signing of PPA. Nevertheless, by the aforesaid order dated 08.09.2010, the State
Commission re-determined the tariff at Rs. 3.18 per unit for the first twelve years
(as against Rs. 2.80 per unit approved earlier) and Rs. 1.93 per unit for the
thirteenth to fifteenth years (as against Rs. 1.70 per unit approved earlier).
36. Though respondents have assailed the aforesaid revision in tariff before
this Tribunal, however order dated 08.09.2010 was upheld by this Tribunal in the
judgement dated 27.04.2012.“ UHBVNL v. Haryana Electricity Regulatory
Commission”, in Appeal No. 78 of 2011. The Tribunal held that the final tariff
has to be determined based on the actual cost of the completed project and the
Regulations framed under the enabling provisions of the Act will override the PPA.
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Consequently, the Respondent- Discom are obligated to pay the enhanced tariff
of Rs. 3.18 per unit for the first twelve years and Rs. 1.93 per unit for the thirteenth
to fifteenth years, in terms of the State Commission’s order dated 08.09.2010, as
upheld by this Tribunal.
37. It is evident from the above, that Appellant, while engaging with Irrigation
department undertook to carry out the additional works at its own cost, though
subsequently claimed the expenditure in tariff, which claims were also allowed.
The record further discloses that the Appellant continued to correspond with the
Irrigation department, requesting them to maintain FSL of 916 Ft. It was
represented that on the advice of local irrigation department, pond level was
being maintained below the FSL due to seepage concerns raised by farmers,
which in turn impaired the Appellant’s ability to generate the requisite energy. The
matter was considered in a review meeting held on 24.07.2013, wherein the
Irrigation Department records that maintenance of FSL at 916 ft. could result in
submergence of adjoining agricultural areas and consequent damage to crops.
Subsequently, the Irrigation Department recorded that, in the absence of an
appropriate remedial measure to control seepage, maintenance of pond level
beyond 913 ft. was not desirable.
38. In order to examine the seepage problem and to identify appropriate
remedial measures, a study was undertaken by WAPCOS. The said study
suggested various measures for addressing the seepage and related issues,
which was discussed in a meeting on 29.10.2015, wherein Appellant represented
that measures suggested by WAPCOS were not only time consuming but
involves high cost as well as shutting down of the canal for prolonged period
thereby affecting operations. The matter continued consideration before the
concerned authorities, and on 10.11.2015, a committee constituted to assess the
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affected area reported that approximately 6 acres of land was submerged with
seepage water and approximately 80 acres was partially affected.
39. Thereafter in 2014, Appellant filed a petition before State Commission for
re-determination of Tariff in view of non-maintenance of FSL of 916 Ft, in which
Impugned Order dated 18.12.2015 has been passed. After considering in detail
the submissions made by Irrigation Department, HAREDA, Respondent Discom,
MOU, PPA between the parties, State Commission in conclusion observed as
under and dismissed the petition.
“The Commission has also taken note of the submissions by the Petitioner
their rejoinder to the reply filed by Irrigation Department) that the seepage
problem existed even prior to the construction of the project as is evident from
the fact that the 'Seepage drain' was constructed along WYC (MLU) and
Hydel Channel even prior to the constructions of BRCL's project. A siphon
was also provided to drain out the water. Now we refer again to clause 1 of
the MOU wherein it has been provided that the Government shall allow
pondage to be created in the upstream to the FSL or allowable free board
level for sustainable power generation purpose and in such cases canal
banks in the upstream shall be adequately strengthen by the company.
The Commission observes that had BPCL exercised due diligence, it could
have foreseen that with the creation of pondage and rise in level at Dadupur
Pond, the water level in the upstream side of WYC(MLU), Hydel channel and
Som river would further aggravate the seepage problem and may lead to
water logging of the adjoining areas. All the measures which have been
suggested by WAPCOS would have been evaluated by BPCL viz-a-viz the
financial viability of the project right at the time of inception of project and
preparation of DPR. Further had BPCL prudently estimated/envisaged the
expenses to be incurred on strengthening of the embankments and on other
measures so as to ensure that there would be no water logging of the
adjoining areas or at least the problem of seepage would not be aggravated,
they might have structured the project in a different manner, may be a project
of lesser capacity with lower capital cost.
Thus, this Commission has every reason to believe that it was an ill-conceived
project and no proper due-diligence was exercised by M/s BPCL as also
recorded in the Commission's Order dated 08.09.2010 which has attained
finality as the same was also upheld by the Hon'ble APTEL and no statutory
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appeal, as per information of this Commission, have been filed by any party
in the Hon'ble Supreme Court.
In view of the above discussions the Commission holds that the present
Petition for re-determination of tariff is misconceived and is accordingly
rejected.”
40. In hydroelectric projects, the Full Supply Level (FSL) denotes the maximum
water level in the reservoir under normal operating conditions, corresponding to
100% of its designed storage capacity. It represents the highest elevation to
which water is stored for routine purposes such as power generation, irrigation,
and municipal supply, but excludes flood situations. While the correlation
between Head, Discharge, and generation is undeniable, the responsibility to
revalidate the declared FSL and design the project accordingly rests squarely
with the developer. In our considered view, it is incumbent upon the project
developer, as proponent of the hydroelectric scheme, to undertake
comprehensive and independent studies to cross-verify the Full Supply Level
(FSL) indicated and to determine parameters like design head, design discharge,
and consequently the installed capacity and tariff viability of the station. It is
noteworthy that the project was initially conceived as a 4 MW installation.
However, upon completion of detailed studies and investigations, the Appellant
itself proposed enhancement of the capacity to 6 MW, with a projected design
energy of 31.5 MUs and a Plant Load Factor of 59.95%.
41. Prudence requires that the developer validate the declared FSL through
hydrological yield analysis, topographical and geological surveys, sedimentation
and silt yield studies, and environmental and social impact assessments, so that
the reservoir level is not overstated beyond what is realistically attainable. The
ratio of UHBVNL judgement does apply in the present issue, as the Appellant is
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seeking revision of project parameters thus redetermination of tariff once again,
while for maintaining the FSL of 916 Ft, additional cost has already been allowed.
42. It has been rightly observed in the Impugned Order that Appellant failed to
undertake due diligence and blindly accepted the data given, relevant paragraphs
of the Impugned Order are extracted hereunder:-
“3. The DPR seems to have undergone two iterations in the year 2006 and 2007
after the first DPR reportedly prepared in the year 2002. However, the issue of
FSL including site suitability and achievable pond level for a 6 MW project was
never dealt with despite existence of Clause 19 of the MOU wherein it was
provided that HAREDA / Government shall not be responsible for any increase
and decrease in generation as a result of variation in the Canal Flow. Hence,
the Petitioner it seems blindly accepted and proceeded to construct the project
on an assumption that FSL of 916 ft. will be available to it. Such an assumption
defies all cannons of financial prudence and project risk management especially
in a hydro project which even otherwise is susceptible to geological surprises at
the project implementation stage and subsequently. Thus, the reasons now
highlighted by WAPCOS in its final Report submitted to the Irrigation
Department, Haryana on "Remedial Measured for Controlling Seepage Caused
due to Raising of Pond Level at Dadupur-Haryana" should have been known to
the Petitioner at the time of inception of Project itself, had due-diligence was
exercised. Hence, they ought to have taken remedial measures as per the
relevant Clause of the MOU dated 7th June, 1999.”
43. The reliance has been placed by Appellant on “ Greenyana Solar (P) Ltd.
v. HERC”, Appeal No. 302 of 2024 decided on 23.04.2025; to contend that project
specific tariff determination under section 62 of the electricity is to arrive at a tariff
that is uniquely tailored to the economic and operation realities of a particular
project. In the said judgment, the issue pertained to deciding the allowable AC:
DC ratio in a solar project for arriving at a particular Capacity Utilisation Factor
(CUF) and permitting the associated cost. The factual matrix of that case is clearly
distinguishable and does not apply to the present matter. In the instant case, the
project parameters were required to be finalized by the Appellant after exercising
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due diligence. The Appellant itself proposed the design energy and estimated the
cost in the Detailed Project Report, which was subsequently enhanced on the
Appellant’s own proposal. Had the Appellant undertaken proper due diligence and
accurately estimated the project parameters including the cost, and financial
viability, such issues could have been conclusively determined at the DPR stage
itself, prior to signing of the PPA. Instead, the Appellant is seeking piecemeal
increase in cost for no fault of Respondent- Discom.
44. Appellant has placed reliance upon the decision in “ Patikari Power Ltd. v.
HPERC” Appeal No. 179 of 2010 decided on 23.04.2012, wherein tribunal
observed that the tariff of a hydroelectric project depends significantly on its
capital cost and water inflows and where the actual river discharge was
substantially lower than the discharge anticipated at the planning and tendering
stage would tantamount to change in the circumstance which are beyond the
control. The Tribunal further noted that, since the developer therein had relied
upon hydrological data furnished by the Respondent, the shortfall amounted to a
change in the basic parameters underlying the project. Accordingly, it was held
that the State Commission can review the already concluded PPA between the
developer and generator and Appellant was granted liberty to approach the State
Commission with supporting material and data for consideration after hearing the
concerned parties. The factual matrix of the present case, however, is materially
different. The DPR prepared by the Appellant was not based upon data submitted
by the Respondent-Discom. On the contrary, under the terms of the MOU
executed with the Irrigation Department, the responsibility for carrying out the
requisite investigations and preparing the DPR rested squarely upon the
Appellant.
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45. The Appellant thereafter executed the PPA with the Respondent-Discom
subsequent to the finalization of project parameters and cost in the DPR.
Furthermore, our attention has not drawn to any clause in the PPA, which
stipulates that tariff so noted in the PPA is conditional upon availability of FSL of
916 ft and Respondent-Discom would be liable to pay enhanced tariff, if any, on
account of non availability of FSL of 916 Ft. In such circumstances, any deficiency
in achieving the proposed design energy cannot be attributed to the Respondent-
Discom, nor can the Respondent-Discom be saddled with the burden of higher
tariff on account of the Appellant’s failure to achieve the projected parameters.
46. This Tribunal in its judgement dated 22.08.2014 in “GUVNL v. GERC”
Appeal No. 279 of 2013 dealt with a plea for redetermination of the tariff based
on the capital cost and equity and other parameters. This Tribunal categorically
observed that a party that has accepted a tariff order, executed PPAs on its basis,
and acted upon the agreed tariff cannot subsequently seek its re-determination
on a different basis, where the requirements of promissory estoppel and
legitimate expectation are satisfied. The Tribunal further held that the project
developers had invested in establishing their projects relying on the existing tariff
framework and that the tariff order had attained finality. It further held that the
settled tariff could not be reopened through subsequent proceedings, as the
principles of res judicata applied. Accordingly, the Tribunal upheld the State
Commission’s findings on promissory estoppel, legitimate expectation and res
judicata.
47. Ratio of the aforesaid judgement squarely applies to the present case.
Here, the tariff was in fact re-determined by the State Commission, subsequent
to execution of PPA, vide its order dated 08.09.2010, which has affirmed by this
Tribunal in its judgement dated 27.04.2012, with no appeal preferred against the
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said judgement and parties have acted upon it. Consequently, the issue of tariff
has attained finality between the parties. It is reiterated that Appellant, while
seeking redetermination of tariff earlier, never sought revision of design energy
on account of non-achieving of FSL of 916 Ft.
48. The findings of this Tribunal’s judgement in “Puri Oil Mills Ltd. v. HPPC”
in Appeal No. 90 of 2013, decided on 09.04.2014 is applicable in the present
case. In this matter, the Tribunal rejected the Appellant’s claim for additional
capital cost, enhanced O&M charges and compensation for loss of generation
arising from damage to the canal, its poor condition and the Irrigation
Department’s requirements for canal maintenance. The Tribunal observed that
strengthening the canal banks and maintaining the canal upstream and
downstream of the project were the Appellant’s responsibilities, and that it had
sufficient opportunity to assess the canal’s condition before entering into the PPA.
Accordingly, the Tribunal found no valid ground to reopen the PPA or re-determine
the tariff of the Appellant hydro projects. The ratio of the aforesaid judgment
squarely applies to the present case, as in the present case Appellant seeks to
shift responsibility for low generation on account of non-maintenance of FSL and
seepage control onto the Respondent-Discom, despite the fact that such
obligations were contractually not vested in the Respondent - Discom.
49. We are in agreement with the contentions advanced by Respondent –
Discom that a developer who fails to verify the relevant project conditions despite
being cautioned to do so acts at its own peril. In the present case, tariff as re-
determined vide State Commission order dated 08.09.2010 and reaffirmed by this
Tribunal in its Judgement dated 27.04.2012, constitutes the finally agreed tariff
between the parties. Appellant cannot seek re-determination of tariff once again.
Hon’ble supreme Court in catena of Judgements ( “HPPC v. Sasan Power Ltd.,
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Judgement in Appeal No. 55 of 2016
(2024) 1 SCC 247; “GUVNL v. Solar Semiconductor Power Co.”, 2016 (16)
SCC 498,; GUVNL v. EMCO Ltd. and TRANSCO v. Sai Renewable Power,
(2016) 11 SCC 182, has emphasized the sanctity of the PPA and held that the
agreed tariff cannot be altered merely by invoking regulatory or inherent powers.
The ratio of the aforesaid judgments squarely applies to the present case, where
the tariff has already been re-determined and affirmed, and the parties have acted
upon it. The sanctity of the PPA, coupled with the doctrines of finality and
estoppel, precludes any further reopening of the tariff issue.
50. Before concluding, it is necessary to deliberate upon the issue of filing of
additional documents by Appellants through I.A. 1932 of 2026 dated 28.08.2026.
The hearing in the matter was concluded on 14.08.2026 and parties were granted
two weeks’ time to file their respective written submissions. However, subsequent
thereto, Appellant filed the aforesaid I.A. seeking permission to place on record
following additional documents, purportedly to answer a query by the bench about
the basis of FSL of 916 ft during the hearing of the matter.
“ a) Annexure A-1: Proposal Evaluation Report dated 14.02.2003 prepared
by the Technical Evaluation Committee, Government of Haryana, evaluating
the proposal of BPCL for installation of the 6 MW (4x1.5 MW) Small Hydro
Project at Dadupur.
b) Annexure A-2: Letter dated 20.11.2006 issued by the Chief
Engineer/YWS, Irrigation Department, Haryana, approving setting up of the
Small Hydro Project at Dadupur.
c) Annexure A-3: Addendum dated 09.03.2007 to the Tripartite MoU dated
07.06.1999 executed between HAREDA, the Haryana Irrigation
Department, and BPCL, extending the validity of the said MoU.
d) Annexure A-4: Letter dated 09.03.2010 issued by the Executive Engineer,
Water Services Division, Dadupur, sanctioning closure of the additional
Head Regulator gates commissioning of the 6 MW Hydro Project.
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e) Annexure A-5: Letter dated 15.12.2010 issued by BPCL to the Executive
Engineer, Water Services Division, Dadupur, regarding cleaning the
seepage drain.
f) Annexure A-6: Letter dated 27.11.2013 issued by the Director General,
Renewable Energy Department, Haryana & HAREDA, to the Engineer-in-
Chief, Irrigation & Water Resources Department, Haryana, regarding
maintaining of pond level at Dadupur.
g) Annexure A-7: Letter dated 01.01.2015 issued by BPCL, and letter dated
30.12.2014 issued by the Executive Engineer, Water Services Division,
Dadupur, regarding seepage of water in villages Harewa, Jaidhar and
Jaidhary due to increase of pond level, the latter reproducing Clause 8 of
the MoU.”
51. Placing of additional documents at such a belated stage, after conclusion
of the hearing, has been strongly objected by the Respondent-Discom. It is
pointed out that all documents are dated 14.02.2003 to 01.01.2015, i.e. prior to
the date of passing of the Impugned Order and filing of the present Appeal, and
no explanation has been furnished why these documents were not placed earlier.
52. We are also of the view that since the principal issue in the Petition before
the State Commission, as well as in the present Appeal pertained to revision of
tariff on account of non-availability of FSL, being beyond the control of Appellant,
and Appellant wished to rely upon these documents to buttress its case,
permission ought to have been sought to place these documents on record before
this Tribunal during the hearing itself. This would have afforded the Respondent
an opportunity to rebut any claim based on such documents and to contest the
reasons for their non-production before the Commission.
53. A general query from the bench does not entitle the Appellant to place on
record documents, after the matter has been reserved for judgement, particularly
when such documents pertain to a period prior to passing of impugned order. The
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Judgement in Appeal No. 55 of 2016
Appellant, without seeking time to address the query, allowed the matter to be
reserved thereby signifying that its arguments stood concluded. The subsequent
attempt to file additional documents as a matter of second thought cannot be
permitted.
54. Nevertheless, in the interest of justice, we have examined the documents
as well as the objections by the Respondents as noted above. On merit, it is
observed that none of the documents guarantees or assures a FSL of 916 ft to
the Appellant. As already observed above, the issue of leakage was known to the
Appellant at the DPR stage itself. In fact, the letter dated 30.12.2014 (A-7) from
Irrigation department to Appellant, citing the clauses of MOU, assigns the
responsibility of seepage water upstream on the Appellant. Though same was
refuted by the Appellant vide its letter dated 01.01.2015, however such
correspondence does not advance its case against the Respondent-Discom as
they have been assured a tariff based on design parameters of the project so
finalised by the Appellant. As such, the issue of non-achievement of FSL of 916
ft. is not an inter se matter between the Appellant and the Respondent-Discom.
The Respondent-Discom, and consequently the consumers, cannot be saddled
with the burden of enhanced tariff on this account.
55. It is reiterated that, had the Appellant exercised proper due diligence and
accurately estimated the project parameters including cost, design energy, and
financial viability, such matters could and ought to have been conclusively
determined at the DPR stage itself, prior to execution of the PPA. Instead, the
Appellant has sought piecemeal enhancement in tariff, firstly on account
increases in cost, and now reduction in design energy thereby attempting to shift
the burden of its own lapses onto the Respondent-Discom and ultimately the
consumers. Proper investigation and validation of project parameters is the sine
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Judgement in Appeal No. 55 of 2016
qua non for establishing the financial viability of a hydroelectric project, and failure
to do so cannot be visited upon the counterparties.
56. In light of the foregoing deliberations, precedents, and settled principles, we
find no infirmity in the impugned order.
The captioned appeal, along with all pending interlocutory applications, stands
disposed of in the above terms.
th
PRONOUNCED IN THE OPEN COURT ON THIS 30 DAY OF OCTOBER,
2026.
(Virender Bhat)
Judicial Member
(Seema Gupta)
Officiating Chairperson
REPORTABLE / NON-REPORTABLE
Pr/ag/ak
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