Power Transmission Corporation of Uttarakhand Limited, vs Power Grid Corporation of India Limited
- Court
- Appellate Tribunal For Electricity
Judgement in Appeal No. 410 of 2022
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL NO. 410 OF 2022 & IA No. 1512 of 2022
Dated: 02.07.2026
Present: Hon’ble Mr. Virender Bhat, Judicial Member
Hon’ble Mr. Ajay Talegaonkar, Technical Member
IN THE MATTER OF:
Power Transmission Corporation of Uttarakhand Limited,
Vidyut Bhawan, Near ISBT Crossing,
Saharanpur Road, Majra, Dehradun-2488002
Through its Managing Director. ....Appellant(s)
Vs.
1. Power Grid Corporation of India Limited,
“Saudamini”, Plot No. 2,
Sector 29, Gurgaon- 122001.
(Haryana)
Through its Chairman & Managing Director
2. Central Electricity Regulatory Commission,
rd th
3 & 4 Floor, Chanderlok Building,
36, Janpath, New Delhi-110001
Through its Secretary
3. Rajasthan Rajya Vidyut Prasaran Nigam Ltd.,
Vidyut Bhawan, Vidyut Marg,
Jaipur - 302005 (Rajasthan),
Through its Chairman & Managing Director
4. Ajmer Vidyut Vitran Nigam Ltd.,
132 kV, GSS RVPNL Sub-station Building,
Caligiri Road, Malviya Nagar,
Jaipur-302 017 (Rajasthan),
Through its Managing Director
5. Jaipur Vidyut Vitran Nigam Ltd.,
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Judgement in Appeal No. 410 of 2022
132 kV, GSS RVPNL Sub-station Building,
Caligiri Road, Malviya Nagar,
Jaipur-302 017 (Rajasthan),
Through its Managing Director
6. Jodhpur Vidyut Vitran Nigam Ltd.,
132 kV, GSS RVPNL Sub-station Building,
Caligiri Road, Malviya Nagar,
Jaipur-302 017 (Rajasthan),
Through its Managing Director.
7. Himachal Pradesh State Electricity Board,
Vidyut Bhawan, Kumar House Complex Building II,
Shimla-171004 (Himachal Pradesh).
Through its Chairman
8. Punjab State Electricity Board,
Thermal Shed Tia,
Near 22 Phatak,
Patiala-147001(Punjab).
Through its Chief Engineer
9. Haryana Power Purchase Centre,
Shakti Bhawan, Sector-6,
Panchkula- 134109 (Haryana).
Through its Chief Engineer
10. Power Development Department,
Government of Jammu & Kashmir,
Mini Secretariat, Jammu - 180001
Through its Commissioner.
11. Uttar Pradesh Power Corporation Ltd.
Shakti Bhawan, 14, Ashok Marg,
Lucknow 226 001,
Through its Chairman.
12. Delhi Transco Ltd.,
Shakti Sadan, Kotla Road,
New Delhi-110002.
Through its Chairman.
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Judgement in Appeal No. 410 of 2022
13. BSES Yamuna Power Ltd.,
B-Block,Shakti Kiran, Bldg. (Near Karkadooma Court)
Karkadooma 2nd Floor,
New Delhi-110092,
Through its Chief Executive Officer
14. BSES Rajdhani Power Ltd.,
BSES Bhawan, Nehru Place,
New Delhi-110019,
Through its Chief Executive Officer.
15. North Delhi Power Ltd.,
Power Trading & Load Dispatch group
Cennet Building, Adjacent to 66/11 kV
Pitampura-3 Grid Building,
Near PP Jewellers, Pitampura,
New Delhi-110034.
Through its CEO & Managing Director
16. Chandigarh Administration,
Sector -9, Chandigarh - 160009
Through its Chief Engineer.
17. Uttarakhand Power Corporation Ltd.,
Urja Bhawan, Kanwali Road,
Dehradun-248001 (Uttarakhand).
Through its Managing Director
18. North Central Railway,
Allahabad – 211011 (Uttar Pradesh),
Through its Chief Electrical Distribution Engineer.
19. New Delhi Municipal Council,
Palika Kendra, Sansad Marg,
New Delhi-110002.,
Through its Chairman. ...Respondent(s)
Counsel for the Appellant(s) : Mr. Buddy A. Ranganathan, Sr. Adv.
Mr. Shankh Sengupta
Mr. Deep Rao Palepu
Mr. Abhishek Kumar
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Judgement in Appeal No. 410 of 2022
Mr. Harneet Kaur
Mr. Arjun Agarwal
Mr. Nived Veerapaneni
Mr. Karan Arora
Mr. Shubham Mudgil
Counsel for the Respondent(s) : Mr. Shri Venkatesh
Mr. Bharath Gangadharan
Mr. Ashutosh Kumar Srivastava
Mr. Jayant Bajaj
Mr. Nihal Bhardwaj
Mr. Siddharth Nigotia
Mr. Kartikay Trivedi
Mr. Shivam Kumar
Mr. V.M. Kannan
Mr. Jatin Ghuliani
Mr. Anant Singh
Mr. Mohit Mansharamani
Mr. Rishabh Sehgal
Mr. Kunal Veer Chopra
Mr. Suhael Buttan
Mr. Siddharth Joshi
Mr. Abhishek Nangia
Mr. Vineet Kumar
Ms. Soumyaa Sharma
Mr. Punyam Bhutani
Mr. Sanjeev Singh Thakur for R-1
JUDGEMENT
PER HON’BLE MR. AJAY TALEGAONKAR, TECHNICAL MEMBER
1. This Appeal is filed by Power Transmission Corporation of Uttarakhand
Limited (“PTCUL”/ “Appellant”) challenging the Impugned Order dated 31.03.2021
passed by the Central Electricity Regulatory Commission (“CERC”/ “Respondent
No. 2”) in Petition No. 104/TT/2020.
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Description of the Parties
2. The Appellant, PTCUL is a company incorporated under the Companies Act,
1956 and discharges the functions of a State Transmission Utility (STU) in the
State of Uttarakhand under Section 2(67) read with Section 39 of the Electricity
Act, 2003 (“Act”).
3. The Respondent No.1, Power Grid Corporation of India Limited (“PGCIL”),
the original Petitioner in Petition No.104/TT/2020, is a deemed transmission
licsensee under the Act.
4. The Respondent No. 2, the Central Electricity Regulatory Commission
(CERC), is a statutory regulatory body constituted under Section 76 of the
Electricity Act, 2003.
5. The Respondent Nos. 3 to 19, are distribution licensees/ utilities/ state
administration departments in terms of the Act.
Factual Matrix of the Case
6. The present Appeal arises out of the Order dated 31.03.2021 (“Impugned
Order”) passed by the CERC whereby the Commercial Operation Date (COD) of
certain transmission assets (Asset-III) was approved and consequential liability
towards transmission charges was fastened upon the Appellant.
rd
7. In the 23 Standing Committee Meeting (SCM) held on 16.02.2008 at
Dehradun, the scheme for construction of a 400/220 kV substation at Dehradun
by Respondent No. 1 was inter-alia discussed and standard norms regarding the
number of bays for substations were adopted. According to these agreed norms,
six 220 kV line bays were planned at Dehradun. Out of these, on 01.02.2017, two
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1
bays were utilized by the Appellant for actuating the 220 kV D/c Jhajra-Sherpur
line. Thereafter, on 04.02.2017, all six 220 kV line bays were decalred under
commercial operation by Respondent No. 1; however, four bays remained
unutilized due to the non-commissioning of the downstream network.
8. The Appellant-PTCUL was requested to inform utilization plan for these bays
at various points of time. Finally, the Respondent No. 1-PGCIL, by letter dated
20.03.2017, informed the Appellant about the commissioning of the transmission
system and highlighted that four bays remained unutilized, requesting a utilization
plan. The Appellant, however, only undertook internal correspondence dated
30.06.2017 and 27.12.2017 exploring possible future utilization of these bays
which were not communicated to Respondent No. 1.
9. In Petition No. 55/TT/2017, CERC passed an order dated 30.11.2017
determining COD and tariff for Asset-I but declined to approve COD and tariff for
the remaining four bays (termed Asset-II at that point of time but were temed Asset-
III in the Impugned Order), observing that the said assets were not put to regular
service due to the absence of downstream connectivity. Respondent No. 1’s
Review Petition No. 8/RP/2018 against the said order was dismissed by CERC on
12.06.2018.
10. Meanwhile, on 20.12.2018, Long Term Access (LTA) was granted to M/s
SJVN for the Naitwar Mori HEP, requiring implementation of a 220 kV D/c Mori-
Dehradun line along with bays at the Dehradun substation. A Tripartite Agreement
1
It is noted that that while PGCIL calls the sub-station as Dehradun sub-station, PTCUL names
it as Sherpur sub-station. Sherpur is a village and locality within the Dehradun district of
Uttarakhand.
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Judgement in Appeal No. 410 of 2022
dated 31.01.2020 was executed between the Appellant, Respondent No. 1 and
M/s SJVN in this regard.
11. Thereafter, Respondent No. 1 filed Petition No. 104/TT/2020 before CERC
on 06.01.2020 seeking truing-up of tariff and approval of COD for the four
unutilized bays (now termed as Asset-III) as 04.02.2017. During the proceedings,
the Appellant was impleaded as a party for the first time on 25.02.2020.
12. Meanwhile, the issue of implementation of the Mori-Dehradun line was
rd
discussed in the 3 meeting of NRPC Transmission Planning held on 19.02.2021,
wherein it was agreed that the line may be implemented under the Central Sector.
13. By the Impugned Order dated 31.03.2021, CERC approved the COD of
Asset-III as 04.02.2017 and held the Appellant liable to bear transmission charges
from the said date till the commissioning of the downstream network.
14. Pursuant to the Impugned Order, Respondent No. 1 raised monthly bilateral
bills upon the Appellant towards transmission charges for Asset-III from November
2021 onwards.
15. The Appellant challenged the Impugned Order by filing a Review Petition No.
21/RP/2021 before CERC; however, the same was dismissed by order dated
27.05.2022. During this period, the issue regarding utilization of the four bays was
th
also discussed in the 50 meeting of the Northern Regional Power Committee held
on 28.01.2022, wherein no decision was taken in view of the pendency of the
matter before CERC.
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16. Aggrieved by the Impugned Order dated 31.03.2021 and the subsequent
dismissal of the review petition, the Appellant has preferred the present Appeal.
17. The Appellant has prayed for the following relief before us:
“A. allow the present appeal and set-aside the Impugned Order
dated 31.03.2021 passed by the Ld. Central Electricity
Regulatory Commission in Petition No. 104/TT/2020 to the
extent that it has determined the COD for Asset-III as 04.02.2017
under proviso (ii) of Regulation 4(3) of the 2014 Tariff
Regulations, and has held the Appellant to be liable to build the
downstream networks and liable to bear the yearly transmission
charges for Asset-Ill from COD on 04.02.2017 to COD of the
downstream networks;
B. declare and hold that PTCUL/Appellant is/was not liable to
make the downstream asset with respect to Asset-Ill;
C. declare and hold that PTCUL/Appellant is not liable to pay
yearly transmission charges of the Asset-Ill;
D. quash and set aside the bills (refer para 7.34) raised by the
Respondent No.1 upon the Appellant seeking payment of
transmission charges for Asset-Ill; and
E Pass such further or other orders as may be deemed
necessary in the facts and circumstances of the present appeal.”
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Issues for Consideration
18. After hearing the Learned Senior Counsel for the Appellant and the Learned
Counsel for the Respondent at length and carefully considering their respective
submissions, we have also examined the written pleadings and relevant material
on record. We have framed the following issues for our consideration mainly based
on the submissions of the Appellant:
Issue 1: Whether the minutes of meetings and related correspondence, in
the absence of any Contractual or statutory provision create any binding
obligation on PTCUL to construct downstream assets?
Issue 2: Can PTCUL be made to pay transmission charges for the subject
bays, particularly under the PoC-based regime applicable during 2014-2019.
Issue 3: Can COD of the subject bays be declared without actual utilization?
Issue 4: Whether the Impugned Order is vitiated by deviation from CERC’s
earlier orders on the same asset?
Issue 5: Do record establish that the bays were constructed for PTCUL?
Issue 6: Whether PGCIL’s own conduct, including delay in commissioning
the bays, non-impleadment of PTCUL in initial tariff proceedings and later
tripartite LTA arrangements, operates as estoppel against any allegation of
prior binding obligation on PTCUL?
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Judgement in Appeal No. 410 of 2022
Submissions of the Parties, Our Analysis and Conclusions
Issue 1: Whether the minutes of meetings and related
correspondence, in the absence of any Contractual or statutory
provision create any binding obligation on PTCUL to construct
downstream assets?
Submissions of PTCUL
19. The Appellant submits that CERC and PGCIL have proceeded on an
erroneous legal premise in treating minutes of a planning forum as
constituting consensus ad idem so as to create binding financial liability upon
PTCUL. It is contended that consensus ad idem requires a concluded and
enforceable agreement with clear intention to create legal relations, certainty of
terms and enforceability, which is admittedly absent in the present case.
20. It is contended that the minutes of Standing Committee meetings (SCMs)
and NRPC meetings are characterised as mere coordination and planning
documents, which do not, by themselves, constitute contracts or impose
obligations in the absence of any implementation agreement, TSA, LTA or other
binding instrument. The Appellant submits that its participation in such statutory
planning meetings and routine system-planning correspondence was in discharge
of its statutory functions as State Transmission Utility and cannot be retrospectively
construed as creating commercial liability or enforceable obligations.
21. It is specifically denied by PTCUL that the 23rd SCM reflects any agreement
that the six 220 kV bays were constructed for PTCUL or that PTCUL assumed any
obligation to develop downstream connectivity or to bear any transmission charges
for the subject bays. The minutes do not record any agreement, commitment or
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allocation of tariff liability upon PTCUL, nor do they stipulate any timelines for
downstream implementation that could be enforced as contractual obligations.
Submissions of PGCIL
22. PGCIL disputes PTCUL’s plea of absence of consensus ad idem and
contends that consensus within the statutory transmission-planning framework is
established through deliberations and recorded decisions in SCM and NRPC
meetings. According to PGCIL, the 23rd SCM dated 16.02.2008, read with the 25th
SCM dated 17.07.2008, records agreement of all stakeholders, including PTCUL,
that six 220 kV line bays at Dehradun substation would be constructed by PGCIL
for PTCUL’s use.
23. PGCIL further relies on subsequent SCMs (34th on 08.08.2014, 36th on
13.07.2015, 37th on 20.01.2016 and 38th on 30.05.2016) to submit that the
understanding regarding matching development of upstream and downstream
systems was repeatedly reiterated and that PTCUL indicated that its 220 kV
system from Dehradun would be ready by March 2015. In the 41st NRPC meeting
dated 27.02.2018, PTCUL itself is stated to have proposed specific utilization of
the bays for Dehradun-Naugaon and Dehradun-Selaqui lines, and in the 42nd
NRPC meeting dated 28.06.2018 to have provided a concrete utilization plan
including Yamuna basin projects.
24. PGCIL also relies on its letters issued between 2013 and 2017 seeking
updates on downstream connectivity, which were received without objection, and
on internal correspondence of PTCUL (including letters dated 30.06.2017 and
27.12.2017) acknowledging planned utilization of the six bays. On this basis,
PGCIL submits that there was a clear and continuing meeting of minds and that
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formal execution of a TSA/LTA was not a pre-condition for PTCUL’s obligations to
arise in this statutory planning context.
Analysis & Conclusions
25. It is settled position of law that even an oral agreement can be construed as
contract, if such oral agreement encompasses a concluded agreement on all
material terms and the parties intended to be bound at that stage, then the contract
is complete even though a later formal document is contemplated. (Kollipara
Sriramulu v. T. Aswathanarayana, 1968 SCC OnLine SC 87).
26. It must be kept in mind that in India, electricity sector is governed by policies,
rules and regulations issued under the Act. Further, the transmission segment of
electricity sector is closely regulated. Therefore, it is essential that we first look at
the policy prescription in the National Electricity Policy (NEP) issued in February,
2005. The relevant part of paragraph 5.3.2 of the NEP is reproduced below:
“5.3.2 Keeping in view the massive increase planned in generation and also for
development of power market, there is need for adequately augmenting transmission
capacity. While planning new generation capacities, requirement of associated
transmission capacity would need to be worked out simultaneously in order to avoid
mismatch between generation capacity and transmission facilities. The policy
emphasizes the following to meet the above objective:
•
……
•
……..
•
Network expansion should be planned and implemented keeping in view the
anticipated transmission needs that would be incident on the system in the open
access regime. Prior agreement with the beneficiaries would not be a pre-
condition for network expansion. CTU/STU should undertake network
expansion after identifying the requirements in consultation with stakeholders
and taking up the execution after due regulatory approvals.
• … …”
(Emphasis Supplied)
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27. Further, Section 3.4 (b) of the Indian Electricity Grid Code issued by CERC
in 2006 (IEGC 2006), provides as under:
“3.4 Planning Policy
(a)…
….
(c) In addition to the major inter-State transmission system, the CTU shall plan, from
time to time, system strengthening schemes, need of which may arise to overcome
the constraints in power transfer and to improve the overall performance of the grid.
The inter-State transmission proposals including system strengthening
scheme identified on the basis of the planning studies would be discussed,
reviewed and finalized in the meetings of Regional Standing Committees for
Transmission Planning constituted by CEA, in consultation with the
beneficiaries, RPC, CEA and the RLDC.
…..”
(Emphasis Supplied)
28. The revised IEGC was issued by CERC in 2010 and the relevant provision
reads as under:
“3.4 Planning Philosophy
(a)…
….
(c) In addition to the inter-State transmission system, the CTU shall plan, from time
to time, system strengthening schemes, need of which may arise to overcome the
constraints in power transfer and to improve the overall performance of the grid. The
inter-state transmission proposals including system strengthening scheme
identified on the basis of the planning studies would be discussed, reviewed
and finalized in the meetings of Regional Standing Committees for
Transmission Planning constituted by CEA, in consultation with the Regional
Entities, RPC, CEA, NLDC and the RLDC and action may be taken by CTU on
the basis of Power Purchase Agreements (PPAs) signed with the beneficiaries.
In case of associated transmission system where all PPAs have not yet been signed,
and where agreement could not be reached in respect of system strengthening
schemes, the CTU may approach CERC for the regulatory approval in accordance
with Central Electricity Regulatory Commission (Grant of Regulatory Approval for
Capital Investment to CTU for execution of Inter-State Transmission Scheme)
Regulations, as and when they come into force .
…….”
(Emphasis Supplied)
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29. A combined reading of the relevant policy prescriptions and the provisions of
the IEGC demonstrates that the process of transmission system planning
undertaken in the meetings of the Regional Standing Committee (referred to as
“SCM” in the present case) has the requisite regulatory sanction. Further, it is well
recognised that certain terms and conditions that would ordinarily form part of a
contract, including the determination and recovery of transmission charges,
emanate from and are governed by the applicable Regulations. Therefore, in our
considered view, the Minutes of Meeting may constitute a contractual framework,
provided that the essential terms are sufficiently crystallised, including, inter alia,
the identity of the entity responsible for development of the transmission system
(either on its own or through another agency) and the timelines for execution of
such works. If there is no agreement on necessity of a transmission element, then
also in line with NEP, the agencies responsible for planning namely CEA and CTU
can decide to go ahead, if they are convinced about requirement of such element.
However, in line with the settled position of law, we are of the opinion that the
implementing agency and time lines must be recorded in the minutes of the
meeting (“MOM”) to construe it as contract, both for ISTS element as well as
downstream intra-state element(s) essential for utilisation of the ISTS element.
30. In this context, we intend to examine all the MOM and correspondence relied
upon by the PGCIL to contend that PTCUL had agreed to utilize all the six 220 kV
bays at Dehradun:
rd
(a) 23 SCM meeting held on 16.02.2008
rd
31. The first and perhaps most important document is the minutes of 23 SCM
held on 16.02.2008. The relevant part of the MOM is extracted below:
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Judgement in Appeal No. 410 of 2022
“ 6.0 Region System Strengthening Scheme - New Proposal
6.1 It was also discussed and agreed that in view of increasing demand density
the norm of providing 220 kV bays with 400/220 kV transformers would be revised
as following:-
• For 2x315 MVA - 6 nos. of line bays
rd
• For 3 315 MVA transformer - 2 line bays
• For 500 MVA transformer - 4 nos. of line bays
6.2 It was discussed and agreed that for meeting the increasing demands
and increasing quantum of power supply required to be delivered from
regional grid to state grids, there was need for providing new regional grid
400kV substations at Manesar in Haryana, Kotputli and Neemrana in Rajasthan,
Hapur and Bagpat in U.P, Hamirpur in H.P, Dehradun in Uttrakhand (this would
also facilitate power evacuation from Kotlibhel HEP), New Wanpoh and one s/s for
Jammu in J&K and S/S capacity augmentation at Patiala and Malerkotla in Punjab.
Of these, s/s at Manesar and Bagpat would be GIS and s/s at Neemrana, Hapur,
Hamirpur, Dehradun and other places could be GIS or open yard depending on
availability of space.”
(Emphasis supplied)
32. It emerges that the broad consensus amongst the participants (and not just
PGCIL and PTCUL), inter-alia was that from then onwards, whenever a sub-station
with 2 x 315 MVA 400/220 kV transformers would get established, there will be six
number of bays on 220 kV side. The provision of six 220 kV bays appears to be in
consonance with the planning requirement for adequate downstream evacuation
arrangement, while maintaining the requisite redundancy and operational
flexibility. Each 220 kV bay can typically facilitate transfer of the order of 200-300
MW of power, though the actual capability would depend upon the characteristics,
configuration and rating of the downstream 220 kV transmission line. Though the
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Dehradun Sub-station was intended to cater to the anticipated increase in demand
in Uttarakhand, there is nothing on record to indicate the extent of demand growth
that was envisaged to be served through the said Sub-station in the ensuing years.
In the absence of such material, we are inclined to conclude that the six bays were
created in accordance with the agreed planning norms and were not intended
exclusively for power drawal by Uttarakhand. Also, there is no mention of the date
by which these bays were to be ready, which in our view, is one of the essential
conditions for MOM to be construed as contract.
th
(b) 34 SCM meeting held on 08.08.2014
th
33. Next, reliance is placed by the PGCIL on the minutes of the 34 SCM
meeting. In this meeting, under the item “Establishment of new 400/220 kV
substations in NR”, the statement of GM, PTCUL is recorded as under:
“ GM, PTCUL stated that their 220 kV system for 400 kV Dehradun would be
available by March 2015 matching with the commissioning of the substation”
34. PGCIL has contended, and the CERC has concluded, that PTCUL, during
the said meeting, had assured completion of the downstream assets
corresponding to all six bays by March 2015. However, PTCUL has submitted that
their representative was only speaking about Sherpur (PGCIL)- Jhajra line. In our
opinion, the expression “their 220 kV system” merely denotes the 220 kV
transmission lines being developed by PTCUL and cannot, by itself, be read as a
commitment to utilise all six 220 kV bays envisaged at the Sub-station. The record
is devoid of any indication as to the number of bays that were intended to be
utilised for those lines. Further, now, it is clear (from the internal correspondence
of PTCUL dated 30.06.2017 and 27.12.2017 relied upon by PGCIL) that in the
worst case scenario against PTCUL, it can be said that it was contemplating
constructing downstream transmission lines for use of all the bays, but the
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execution of transmission lines connecting to remaining four bays had not started.
In such a scenario, it is unlikely that GM, PTCUL in a meeting held in August 2014
could have promised completion of entire downstream network using all six 220
kV bays within 8 months so as to be ready by March 2015. It is surprising that none
of the participants in the meeting, including PGCIL requested PTCUL to furnish
details of the downstream network being constructed, which would have brought
clarity that seems to be missing in the hindsight.
th
(c) 36 SCM meeting held on 13.07.2015
35. We find that the only relevant part recorded in this MOM in the relevant
context is as under:
“25. Establishment of new 400/220kV substations in Northern Region :
25.1. POWERGRID informed the capacity and expected schedule of the new
400/220V substations which are under implementation under various transmission
schemes. These are 400/220kV Kurukshetra(GIS), Dehradun, Bagpat(GIS),
Saharanpur, Rajghat(GIS), Papankalan-I(GIS), Tughlakabad(GIS), Kala Amb,
Amargarh, Patran, Kadarpur(GIS), Sohna Road(GIS), Prithala(GIS) and Jauljivi and
220/66kV GIS S/s at Sector 47, Chandigarh.
25.2. POWERGRID requested for implementation of adequate 220kV downstream
transmission system by the States in matching time frame for utilization of the above
ISTS substations.
25.3. STUs noted the above and agreed to inform the planned 220kV transmission
system from these substations and their status to CEA and CTU in the next SCM.”
36. It is clear from the above that the discussion recorded does not support the
contention of PGCIL in any way as there is only a promise by STUs (including
PTCUL) to inform the status.
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(d) 37 SCM meeting held on 20.01.2016
th
37. The discussions in the 37 SCM meeting on the relevant issue proceeded
th
almost in the same manner as in the 36 SCM meeting. The relevant part of the
minutes of this meeting is extracted below:
“29.0 Establishment of new 400/220kV substations in Northern Region:
29.1 Powergrid informed that the following new substations were planned under
various transmission schemes & are under implementation:
S.
No.
Name of
Substation
Capacity (MVA) Expected
Schedule
1
2
3 400/220kV
Dehradun
Sub station
2 x315 Mar’16
4
5
…
30.2 For above 400/220kV substations, implementation of downstream 220k V
elements needs to be commissioned at the earliest for utilization of the system. It was
desired that the 220kV system also gets commissioned in the matching time frame.
Appropriate STUs may note the above and inform the committee about the planned
220 kV system from these substations and their status to CEA and CTU.
Members noted the same.”
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38. It may be seen from the extract in the preceding paragraph that the expected
date of commissioning of Dehradun substation was pushed further to March 2016
by PGCIL. Only a desire was expressed that STUs should commission their
downstream network with matching timeframe and inform status to CEA and CTU.
It is worth mentioning that at that point of time, PGCIL was also functioning as
CTU. PGCIL has not placed on record any document to show whether or not
PTCUL had submitted that status, and if not, whether this was followed up with
them by PGCIL.
(e) Letter dated 20.04.2016
39. This letter was written by Chief Manager, PGCIL to Superintending Engineer,
PTCUL. The relevant part of the letter is reproduced below:
“Construction of 400/220 KV Sherpur Substation is almost complete. The 400 KV D/C
Dehradun-Bagpat and 400 KV D/C Dehradun-Abdullapur transmission lines are at
advance stage of competion and the same shall be completed by end of June 2016.
We shall therefore be ready for charging of 400/220 KV Sherpur Substation by
30/06/2016.
However, power flow may be possible only after completion of 220 KV Jhajra-Sherpur
line. You are requested to complete the construction work of 220 KV Jhajra-Sherpur
line on or hefore 30/06/2016. The progress details of the line may be given to us for
reference.
This is for your kind information please.”
40. It may be seen from the above extract that PGCIL was only seeking the
status of PTCUL's 220 kV Jhajra-Sherpur line, which was ultimately commissioned
and utilised two bays. No mention is made of the remaining four bays. While not
conclusive, this circumstance tends to indicate that utilisation of all six bays by
PTCUL may not have been contemplated at that stage.
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(f) Letter dated 25.04.2016
41. This letter was from DGM, PGCIL to Director (Projects), PTCUL. The
relevant extract is reproduced blow:
“As you are aware that construction of 400/220KV 2x 315MVA Dehradun substation is
almost completed. Pre-commissioning activities of both 400Kv as well as 220KV
switchyard are in final stage. Connecting 400KV lines viz. 400KV D/C Dehradun-
BaghPat and 400KV D/C Dehradun-Abdullapur are targeted to be completed by June
2016. Thereupon substation will be commissioned and charged from Abdullapur
Rookee & Baghpat 400KV substations POWERGRID. But it appears that construction
of outgoing 220KV feeders by M/S PTCUL is progressing at a very slow pace. You are
requested to please expedite the construction of outgoing 220KV feeders to match with
our commissioning schedule.”
42. It may be seen that aforesaid letter only mentions that 220 kV downstream
feeders of PTCUL were progressing at very slow pace. There is no specific
mention of 220 kV Jhajra-Sherpur line of PTCUL. However, since this was the
only 220 kV line of PTCUL terminating at Dehradun sub-station which was under
construction, it is logical to conclude that the slow progress was being attributed
to this line only.
th
(g) 38 SCM meeting held on 30.05.2016
43. It is seen from the item 21.0 titled “Mismatch of network at the time of
declaration of Date of Commercial Operation (COD)” of the MOM of the aforesaid
meeting that a concern was expressed by PGCIL, which was emanating from an
order of CERC, which had held as under:
“In case of cost plus, the mismatch between Generation/Downstream
network/Upstream network, Transmission licensee will not burden the consumers and
the charges would be compensated through the IA between the parties”
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44. In the MOM, there is also mention of the direction of CERC that such assets
shall not be included in the computation of PoC charges and in case of declaration
of commercial operation of such assets, transmission charges shall be recovered
from the concerned generator/STU/Discoms. Further, there is mention of a new
regulation framed by the CERC which requires transmission licensee to endavour
to match commissioning of its transmission system with that of other transmission
licensee and this shall be ensured through an appropriate Implementation
Agreement (IA).
45. The CERC’s order appears to have dispelled any expectation that
transmission charges could continue to be recovered without utilisation of the
bays.
46. However, the MOM also reveals that the expected date of commissioning of
Dehradun sub-station was indicated just within one or two month (July 2016);
whereas the actual commercial operation took place in February 2017. Further,
the STUs were requested to furnish status of outgoing 220 kV lines and sign IA
with PGCIL. Thus, nothing recorded in the MOM supports contention of PGCIL.
Further, subsequent MOM and correspondence does not indicate if PGCIL had
made any attempt to sign Implementation Agreement (IA) for outgoing
transmission lines as mandated by CERC. Discussion for signing of such IA itself
would have given clarity on the system actually being implemented by PTCUL.
th st
(h) 38 meeting of TCC and 41 meeting of NRPC held in February 2018
47. For the first time, it was recorded that one bay would be utilised for the
Naugaon Sub-station and two bays for the proposed Selaqui Sub-station, covering
only three of the four unutilised bays. Significantly, the minutes indicate a plan for
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future development of the downstream lines rather than implementation of any
long-standing commitment. Consequently, they do not support the proposition that
transmission charges were recoverable from the date of commercial operation, i.e.
04.02.2017. Representative of PTCUL was present in this meeting. However, no
date for completion of the downstream lines was recorded. Without any indication
of when PTCUL’s downstream lines were to be completed, it is impossible to
ascertain the point in time from which any liability for transmission charges could
be fastened upon PTCUL. The absence of such a timeline deprives the
arrangement of a fundamental element ordinarily expected in a binding contractual
framework.
th nd
(i) 39 TCC and 42 NRPC meetings held in June 2018
48. The use of 2 bays each for Yamuna Basin (Mori sub-station) and Selaqui
sub-station is recorded in the MOM. Though not clearly mentioned but the relevant
transmission lines were to be presumably developed by PTCUL. However, here
also, in the absence of any mention of the date of completion, we do not consider
the MOM satisfies the necessary requirements for being treated as a contract.
(j) Subsequent TCC and NRPC meetings
49. Thereafter, there are few TCC and NRPC meetings, where it is recorded that
220 kV Dehradun -Jhajra D/c line would be completed in November 2021, as if this
was to be new line for use of two of the four unused bays. However, as recorded
in the Order dated 30.11.2017 of CERC in Petition No. 55/TT/2017, this line had
already been commissioned in February 2017.
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(k) Letters written by PGCIL
50. We note that there are several letters written by PGCIL before and after the
commercial operation of Dehradun substation requesting PTCUL to submit
utilization plan for the bays. We believe that there was no reply from PTCUL, as
neither PGCIL nor PTCUL has placed any such response on record. PGCIL could
get hold of some internal correspondence of PTCUL and contended that PTCUL
had planned to use the remaining four bays, and since these plans did not
materialize, the four bays remained unused. However, we are of the opinion that
neither in any letter to PGCIL nor in any meeting, any commitments were made by
PTCUL or any obligation was imposed on PTCUL regarding utilisation of four
unused bays.
51. Based on the aforesaid analysis of the MOM and correspondence relied
upon by PGCIL, we conclude that- (i) the six bays at Dehradun were created in
accordance with the agreed planning norms and not specifically for use by PTCUL,
and (ii) there was no explicit or implicit agreement by PTCUL that it will be using
all the six 220 kV bays at Dehradun for constructing downstream network.
Issue 2: Can PTCUL be made to pay transmission charges for the
subject bays, particularly under the PoC-based regime applicable
during 2014-2019.
Submissions of PTCUL
52. The Appellant submits that there exists no contractual or statutory obligation
upon PTCUL to utilize the subject bays or to construct downstream infrastructure.
No implementation agreement, Transmission Service Agreement or other
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contractual arrangement has ever been executed between PGCIL and PTCUL in
relation to these bays since 16.02.2008; in the absence of such privity of contract,
PTCUL cannot be held liable either for development of downstream assets or for
payment of transmission charges.
53. It is further contended that transmission charges are payable either upon
actual usage of the system or pursuant to an express contractual allocation of risk,
neither of which exists in the present case. The Appellant relies on PSPCL v.
Patran Transmission Company Ltd. (Appeal No. 390 of 2017) and NRSS XXI(B)
Transmission Ltd. v. CERC (Appeal No. 17 of 2019) to submit that liability to bear
transmission charges can arise only where a binding contractual framework clearly
allocates responsibility for upstream or downstream systems, and on PSTCL v.
CERC & Ors. (Appeal No. 109 of 2021) where this Tribunal held that transmission
charges are recoverable only from beneficiaries under contractual arrangements
and cannot be imposed upon a State Transmission Utility in the absence of such
privity.
54. During the relevant control period (2014-2019), recovery of ISTS charges
was governed by the PoC mechanism under the 2010 Sharing Regulations;
accordingly, even where deemed COD is granted, recovery is to be effected
through the PoC pool and not by imposing unilateral bilateral liability on an STU in
the absence of an express contractual or regulatory provision. The Appellant
submits that the 2014 Tariff Regulations do not create any right of bilateral recovery
against an STU, and that PGCIL’s attempt to conflate PTCUL’s statutory planning
role with commercial liability is contrary to settled regulatory and contractual
principles.
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Submissions of PGCIL
55. PGCIL submits that, as CTU and STU respectively, PGCIL and PTCUL
operate under a statutory mandate under Section 38(2)(b) of the Electricity Act,
2003 for coordinated planning and development of inter-State and intra-State
transmission systems, which is implemented through SCM and RPC forums. In
such a regulatory framework, assets are conceptualised and implemented on the
basis of collective decisions in these statutory forums and “formal contracts” are
not indispensable for liability to arise.
56. PGCIL contends that it is a settled principle that where a transmission asset
is ready but cannot be put to use due to delay in the matching upstream or
downstream system, liability for transmission charges lies upon the entity
responsible for such delay; reliance is placed on RAVP Transmission Company
Limited v. PGCIL (Petition No. 43/MP/2016). PGCIL further submits that under the
2014 Tariff Regulations, transmission charges are payable for an asset which has
achieved COD but remains under-utilized on account of delay in the associated
system, irrespective of the PoC framework, and that PTCUL’s express indication
in the 34th SCM that its downstream system would be available by March 2015,
coupled with subsequent utilization plans placed in the 41st and 42nd NRPC
meetings, renders PTCUL the defaulting entity for the period of mismatch.
57. Accordingly, PGCIL’s case is that PTCUL’s responsibility to bear
transmission charges flows from its own default in commissioning the downstream
network within the indicated timeframe and from the statutory planning consensus,
and not strictly from a bilateral TSA/LTA or actual regular usage during the
mismatch period.
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Analysis and Conclusions
58. We have already inter-alia concluded under the issue 1 that- (i) it is not
necessary to have an explicit agreement with a party to fasten responsibility for
sharing of transmission charges on that party, (ii) MOM can also serve the purpose
of contract provided necessary minimum conditions are clearly mentioned in the
MOM, and (iii) based on the MOM of various meetings and correspondence on
record, it cannot be established that there was any commitment by PTCUL to
utilise all the six 220 kV bays at Dehradun for downstream network.
59. We have carefully considered the judgments of this Tribunal relied upon by
PGCIL, namely, PSPCL vs. Patran Transmission Company Ltd. & Ors. (Appeal
No. 390 of 2017), Bhartiya Nabhikiya Vidyut Nigam Ltd. vs. PGCIL (Appeal No.
151 of 2015 and Ors.), Jindal India Thermal Power Ltd. vs. CERC & Ors. (Appeal
No. 275 of 2018 and Ors.), NRSS XXXI (B) Transmission Ltd. vs. CERC & Ors.
(Appeal No. 17 of 2019), Fatehgarh Bhadla Transmission Company Ltd. vs. CERC
& Ors. (Appeal No. 352 of 2022) and Neyveli Uttar Pradesh Power Ltd. vs. UPERC
& Ors. (Appeal No. 332 of 2023).
60. In our opinion, none of the judgments cited by PGCIL assist them in the
peculiar facts of the present case. The authorities relied upon by PGCIL
undoubtedly recognise the principle that a defaulting entity may, in an appropriate
case, be held liable for transmission charges during a mismatch period, they do
not dispense with the requirement of first establishing the source of such
obligation.
61. The fundamental difficulty in applying the aforesaid line of authorities to the
present case is that we have already held, on an examination of the Standing
Committee minutes, NRPC deliberations and various correspondence that no
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contractual or legally enforceable commitment by PTCUL to construct any
downstream network corresponding to the disputed bays has been established.
The very foundation on which liability was imposed in the judgements cited by
PGCIL is therefore absent in the present case. Once it is found that the bays were
not constructed pursuant to any binding commitment undertaken by PTCUL, the
mere fact that the bays remained unutilised cannot by itself create a financial
liability against PTCUL.
62. Therefore, it directly flows from (iii) above in paragraph 58 that the liability of
transmission charges for four unutilised bays can not be fastened on PTCUL. The
question as to whether PTCUL could have been saddled with liability of
transmission charges had a contractual arrangement been found to exist on the
basis of the MoM when Regulations provide for recovery through pool, is purely
academic in the present proceedings. Accordingly, it is neither necessary nor
appropriate to express any opinion on that question.
63. Interestingly, PGCIL has raised issue of co-orinated planning under Section
38 (2) (b) of the Act; particularly as at that point of time PGCIL was also acting as
CTU. However, we consider it necessary to peruse 38 (2) (c) of the Electricity Act,
2003 as well. The relevant extract of this Section is reproduced below:
“ Section 38. (Central Transmission Utility and functions): (1)…..
(2) The functions of the Central Transmission Utility shall be -
(a) to undertake transmission of electricity through inter-State transmission system;
(b) to discharge all functions of planning and co-ordination relating to inter-State
transmission system with –
(i) State Transmission Utilities;
(ii) Central Government;
(iii) State Governments;
Page 27 of 46
Judgement in Appeal No. 410 of 2022
(iv) generating companies;
(v) Regional Power Committees;
(vi) Authority;
(vii) licensees;
(viii) any other person notified by the Central Government in this behalf;
(c) to ensure development of an efficient, co-ordinated and economical system of
inter-State transmission lines for smooth flow of electricity from generating stations
to the load centres;
….”
64. It is clear that coordination is required to be done by CTU not only with
respect to planning function mentioned in (b) above, but also for ensuring
“development of an efficient, co-ordinated and economical system of inter-State
transmission lines” for smooth flow of electricity from generating stations to the
load centres, mentioned in (c) above. We are of the view that merely writing letters
and seeking status updates during meetings constitutes only the beginning, and
certainly not the end, of effective coordination. Both PGCIL (as CTU at the relevant
point of time) and PTCUL (as STU) were statutorily mandated to ensure the
development of an efficient, coordinated, and economical inter-state and intra-
state transmission system in accordance with Section 38 and 39 of the Act
respectively. However, the current record raises prima facie concerns regarding a
potential gap in coordination between the two utilities. While PGCIL engaged in
routine ‘status-taking’ during planning meetings and correspondence, it is
questionable whether it should have taken further steps to hold bilateral meetings
or formalize the Implementation Agreement as envisioned by the CERC; measures
that might have clarified the specific downstream network being implemented by
PTCUL. Furthermore, PTCUL’s failure to respond to PGCIL’s communications
adds to the ambiguity surrounding the factual position.
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Issue 3: Can COD of the subject bays be declared without actual
utilization?
Submissions of PTCUL
65. The Appellant submits that PGCIL has erroneously relied on the second
proviso to Regulation 4(3) of the 2014 Tariff Regulations to contend that approval
of COD automatically results in imposition of transmission charges on PTCUL. It
is urged that the proviso is limited to determination of COD for tariff purposes
where the asset is ready but cannot be put to use due to non-availability of
upstream or downstream systems, and does not in itself identify any liable entity
or create a right of bilateral recovery against an STU.
66. It has been contended that even PGCIL has acknowledged that the
downstream system under PTCUL had not been commissioned; further, the
subject bays were never put to regular use during the relevant period. Relying on
Power Grid Corporation of India Ltd. v. Punjab State Power Corporation Ltd.,
(2016) 4 SCC 797, the Appellant submits that declaration of COD is contingent
upon charging of the line, successful trial operation and the asset being in regular
service, and that approval of COD for bays that are admittedly not in regular use
is contrary to settled law.
67. The Appellant distinguishes Fatehgarh Bhadla Transmission Ltd. v. CERC &
Ors. (Appeal No. 352 of 2022) on the ground that it arose under a different
regulatory framework (2019 Tariff Regulations and 2020 Sharing Regulations) and
a different factual context, and is therefore inapplicable to the present case
governed by the 2014 Tariff Regulations and 2010 Sharing Regulations involving
a regional system strengthening scheme. Reliance on Power Grid Corporation of
India Ltd. v. Madhya Pradesh Power Transmission Company Ltd. & Ors., 2025
SCC OnLine SC 1128, is also stated to be misplaced, as that judgment does not
Page 29 of 46
Judgement in Appeal No. 410 of 2022
hold that an STU can be saddled with transmission charges during a mismatch
period solely on the basis of COD approval in the absence of any contractual
commitment.
Submissions of PGCIL
68. PGCIL submits that the dispute arises solely due to a mismatch between the
transmission assets commissioned by PGCIL and the downstream system to be
developed by PTCUL. In such a situation, the second proviso to Regulation 4(3)
of the 2014 Tariff Regulations expressly permits approval of COD where the
transmission asset is ready but cannot be put to use on account of non-availability
of the corresponding upstream or downstream system.
69. PGCIL contends that the settled legal principle in such cases is that liability
for transmission charges must be borne by the entity due to whose default the
system remains unutilized. Reliance is placed on Nuclear Power Corporation of
India Limited v. CERC (Appeal No. 332 of 2016), where this Tribunal held that the
defaulting entity is liable to pay transmission charges from SCOD till
commissioning of the matching system, irrespective of the existence of a formal
contractual relationship. PGCIL further traces this principle to PSPCL v. Patran
Transmission Company Limited (Appeal No. 390 of 2017) and relies on Fatehgarh
Bhadla Transmission Ltd. v. CERC & Ors. (Appeal No. 352 of 2022) to submit that
such regulatory obligations are binding even in the absence of a contract.
70. On this basis, PGCIL argues that once COD is approved under the second
proviso to Regulation 4(3) and PGCIL has established readiness of the bays, the
liability to bear transmission charges for the mismatch period rests squarely with
PTCUL, which failed to provide interconnecting facilities by the committed timeline
of March 2015.
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Analysis and Conclusions
71. The regulation 4 (3) of CERC Tariff Regulations, 2014 which is relevant for
this issue is reproduced below:
“ 4. Date of Commercial Operation: The date of commercial operation of a
generating station or unit or block thereof or a transmission system or element
thereof shall be determined as under:
….
(3) Date of commercial operation in relation to a transmission system shall mean
the date declared by the transmission licensee from 0000 hour of which an element
of the transmission system is in regular service after successful trial operation for
transmitting electricity and communication signal from sending end to receiving end:
Provided that:
(i) where the transmission line or substation is dedicated for evacuation of
power from a particular generating station, the generating company and
transmission licensee shall endeavour to commission the generating
station and the transmission system simultaneously as far as practicable
and shall ensure the same through appropriate Implementation
Agreement in accordance with Regulation 12(2) of these Regulations :
(ii) in case a transmission system or an element thereof is prevented from
regular service for reasons not attributable to the transmission licensee
or its supplier or its contractors but is on account of the delay in
commissioning of the concerned generating station or in commissioning
of the upstream or downstream transmission system, the transmission
licensee shall approach the Commission through an appropriate
application for approval of the date of commercial operation of such
transmission system or an element thereof.”
72. PTCUL has relied on the Power Grid Corporation of India Ltd. v. Punjab
State Power Corporation Ltd., (2016) 4 SCC 797 . We note that this judgement
was based on Tariff Regulations of 2009 issued by CERC, whereas in the case in
hand, Tariff Regulations of 2014 are applicable. However, the intent and effect of
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Judgement in Appeal No. 410 of 2022
the relevant regulatory provision remains same. In the cited judgement, the
commercial operation was made ineffective because the transmission line in
question was not complete; as switchgear at the other end for protection and
metering to be installed by another party were not in place. There is no doubt that
a transmission line and a bay are different assets. It is an undisputed position that
the bay works at the Dehradun Sub-station were complete on the COD declared
by CERC; the bays were ready and all it required was for someone to create
downstream transmission lines to connect to these bays. In view of the forgoing
analysis, we are satisfied that the conditions mentioned in proviso (ii) of Regulation
4(3) were satisfied and CERC was right in declaring COD of the relevant asset
with effect from 04.02.2017.
73. Next comes the contention of PTCUL that even with declaration of COD
under proviso (ii) of Regulation 4.3, the recovery of the transmission charges
should have been done as per CERC (Sharing of Inter-State Transmission
Charges and Losses) Regulations, 2010, which essentially requires pooling and
socialization; and that transmission charges could not have been levied on PTCUL
even in case of mismatch. Without distracting from the rationale underlying the
“defaulter pays” principle, there may also be a merit in the argument of PTCUL
2
purely from the view point of economic efficiency . The issue of void in the
Regulations about payment of transmission charges in case of mismatch in
2
It can be argued that if each licensee developing an upstream or downstream transmission
system is required to compensate the other in case of delays attributable to it, this may translate
into potentially significant liabilities, which prospective bidders under tariff-based competitive
bidding may seek to cover by quoting higher transmission charges, i.e., by incorporating a risk
premium. This may lead to the discovery of higher transmission charges in future tariff-based
competitive bidding projects and, ultimately, higher liability for Long-Term Transmission
Customers (LTTCs). On the other hand, if this risk is assumed by the LTTCs through
socialization of the impact of delay, the overall increase in liability may be lower, since only a
limited number of projects, rather than all projects, may actually suffer delays. In fact, CERC
through amendment made in October 2023 in Sharing Regulations has tried to limit liability of
party responsible for delay in power flows.
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Judgement in Appeal No. 410 of 2022
commissioning, and the “defaulter pays” principle based on the judgement of
Hon’ble Supreme Court judgement was recognized by this Tribunal in judgement
in Appeal No 322 of 2016 (Nuclear Power Corporation of India Limited v.
CERC) . The relevant extract of this judgement is reproduced below:
“10.3 We further observe that these type of major issues ought to have been covered
under Regulations by the Central Commission to plug the gaps, which would avoid
litigations. The importance of the same was considered by the Central Commission
at one point of time in its order dated 5.8.2015 and directed its staff for appropriate
amendments in the Tariff Regulations, 2014. Till date no such modifications have
been carried out by it in the Regulations. It is however, observed that there are many
regulatory/ judicial orders of the Central Commission to deal with the situations like in
the present case.
10.4 The Hon’ble Supreme Court in the judgement dated 3.3.2016 in Civil Appeal No.
9302 of 2012 in case of PGCIL Vs. PSPCL and Ors. has held that the LTTCs are
liable to pay the transmission charges only when the transmission system is made
operational put to use. The Central Commission has also relied on the said judgement
while formulating principles of payment of transmission charges by the entities before
the transmission system/ asset is made operational/ put to use.
…..
10.6 It is clear that the liability to pay transmission charges by the Appellant to the
Respondent No. 2 from SCOD till downstream system is commissioned does not arise
from the Regulations of the Central Commission. Our most relevant decision matching
to the circumstances of the present case is our judgment dated 27.3.2018 in Appeal
No. 390 of 2017(Patran judgment) where the principles were laid down clearly that
the entity due to which system developed through TBCB route cannot be put to use
is liable to pay the transmission charges from SCOD till commissioning of the
upstream/ downstream system/terminal bays. The Transmission System in question
has also been developed through TBCB route. In the present case as per the
principles laid down by the Central Commission it emerges that NPCIL is the
defaulting party and should have been made liable to pay the said transmission
charges. However, we find that there is no contractual relation between the
Respondent No. 2 and NPCIL.”
74. In view of the foregoing discussion, it is apparent that the CERC proceeded
on the basis of the “defaulter pays” principle, which was by then a well-established
principle governing recovery of transmission charges. However, in light of our
finding that there is no material on record to establish that PTCUL was under an
obligation to develop the downstream network corresponding to all six 220 kV bays
Page 33 of 46
Judgement in Appeal No. 410 of 2022
at the Dehradun Sub-station, PTCUL cannot be treated as a defaulter on that
count. Consequently, the basis for recovery of transmission charges in respect of
the said bays would require fresh examination.
Issue 4: Whether the Impugned Order is vitiated by deviation from
CERC’s earlier orders on the same asset?
Submissions of PTCUL
75. The Appellant submits that CERC, in its earlier orders dated 30.11.2017
(Petition No. 55/TT/2017) and 12.06.2018 (Petition No. 8/RP/2018), declined
approval of COD of the subject bays under proviso (ii) to Regulation 4(3) of the
2014 Tariff Regulations on the ground that the assets were not in regular use and
directed PGCIL to seek COD approval only upon readiness of the downstream
system; these orders were not challenged and have attained finality.
76. Despite there being no change in factual circumstances, PGCIL filed a fresh
petition seeking identical relief, which, according to the Appellant, ought to have
been rejected on the principle of issue estoppel and consistency in judicial
decision-making. The Impugned Order, in approving COD as 04.02.2017 without
identifying any change in circumstances or furnishing reasons for departure from
the earlier consistent view, is said to be arbitrary and unsustainable, and contrary
to the Barh-Balia judgment (upheld by the Hon’ble Supreme Court) that COD can
be declared only upon successful trial operation and regular use.
77. It is further submitted that the Impugned Order is non-speaking, since CERC
has failed to justify its contrary conclusion or to provide any cogent basis for
fastening liability on PTCUL, particularly when PTCUL had not even been
impleaded in the earlier proceedings relating to the same bays. Relying on
Secretary & Curator, Victoria Memorial Hall v. Howrah Ganatantrik Nagrik Samity
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Judgement in Appeal No. 410 of 2022
& Ors., (2010) 3 SCC 732, Vishnu Dev Sharma v. State of U.P., (2008) 3 SCC 172,
and Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405, the
Appellant contends that recording of reasons is an essential facet of judicial and
quasi-judicial decision-making and that absence of reasons renders an order
indefensible.
Submissions of PGCIL
78. PGCIL submits that the earlier orders dated 30.11.2017 (Petition No.
55/TT/2017) and 12.06.2018 (Review Petition No. 8/RP/2018) did not reject
approval of COD on merits but merely deferred consideration until the associated
downstream system was ready, while granting explicit liberty to PGCIL to file a
fresh petition. Petition No. 104/TT/2020 was accordingly filed in compliance with
those directions.
79. It is contended that the earlier orders were procedural and interlocutory in
nature and did not constitute final adjudication on the merits of COD or liability;
therefore, they do not operate as res judicata or issue estoppel, particularly as
PTCUL was not a party to those proceedings. Reliance is placed on Jamia Masjid
v. K.V. Rudrappa, (2022) 9 SCC 225, to support the proposition that such orders
do not bar subsequent proceedings.
80. PGCIL further submits that, upon dismissal of the review petition, the review
order merged with the original order and does not have an independent existence;
in terms of Order XLVII Rule 7 CPC and decisions including Shrihari Hanumandas
Totala v. Hemant Vithal Kamat & Ors., (2021) 9 SCC 99, and DSR Steel (Pvt.) Ltd.
v. State of Rajasthan & Ors., (2012) 6 SCC 782, an order rejecting review is not
appealable and does not itself create rights. PGCIL also points out that CERC is
empowered under Regulation 4(3) of the 2014 Tariff Regulations to approve COD
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Judgement in Appeal No. 410 of 2022
and determine liability for mismatch periods and that this position has been
affirmed by the Hon’ble Supreme Court in Power Grid Corporation of India Ltd. v.
Madhya Pradesh Power Transmission Co. Ltd., 2025 SCC OnLine SC 1128.
81. On this basis, PGCIL contends that the Impugned Order is not a deviation
from a concluded earlier view attracting issue estoppel, but a substantive
determination made in the exercise of regulatory powers upon satisfaction of
conditions for COD under the second proviso.
Analysis and Conclusions
82. The relevant paragraph 23 of the CERC order dated 30.11.2017 is extracted
below:
“ 23. It is observed that Asset-II is not in regular service due to non-availability of
associated downstream transmission system under the scope of PTCUL and
therefore, the COD of Asset-II is not considered in the instant order. The petitioner
is directed to file fresh petition matching with the associated downstream
transmission system.”
83. PGCIL had filed a review petition No. 8/RP/2018 inter-alia on the issue of not
approving deemed commercial operation of the asset. The CERC vide order dated
12.06.2018 rejected the prayer for review expressing that the contention of PGCIL
falls in the scope of appeal and not review. However, PGCIL made a fresh request
for allowing COD of unused 4 Nos. of bays at Dehradun in the Petition No.
104/TT/2020, which was primarily filed for truing up of transmission tariff for some
already commissioned assets relatable to Dehradun sub-station. This time CERC
agreed to the request and allowed COD of these bays with effect from 04.02.2017
under proviso (ii) of Regulation 4.3 of the Tariff Regulations 2014.
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Judgement in Appeal No. 410 of 2022
84. We do not find merit in contention of PTCUL that CERC’s earlier orders
dated 30.11.2017 (Petition No. 55/TT/2017) and 12.06.2018 (Petition No.
8/RP/2018) had attained finality; and that CERC has erred in allowing COD having
rejected the same in earlier order. We agree with the contention of PGCIL that the
CERC had merely deferred consideration of the issue and intended to examine it
upon the development of the downstream network. Whether such deferment was
justified is a separate question, and does not fall for consideration in the present
appeal. Since the CERC had not taken any final view, the argument of PTCUL,
that CERC should have given detailed reasons for deviating from earlier position,
also collapses.
85. At the same time, we are of the view that consideration of the issue could
not have been deferred indefinitely. To hold otherwise would lead to anomalous
consequences. For instance, if the downstream network were not to be
commissioned during the entire economic life of the bays, the issue would remain
unresolved indefinitely. Nothing in Regulation 4(3) of the Tariff Regulations, 2014
mandates that a determination regarding COD under proviso (ii) can be made only
upon actual utilisation of the asset. The regulation does not preclude the CERC
from taking a decision on the basis of the facts and circumstances available at the
relevant point in time.
86. In view of the forgoing analysis, we find no error in the CERC allowing the
COD of the asset. The earlier orders cannot be construed as having conclusively
determined the issue; they merely deferred its consideration pending the
occurrence of relevant events. Consequently, the CERC was not precluded from
examining and deciding the issue in the Impugned Order.
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Issue 5: Do record establish that the bays were constructed for
PTCUL?
Submissions of PTCUL
87. The Appellant has contended that the subject 220 kV bays at the 400/220
kV Sherpur, Dehradun substation were conceived and implemented by PGCIL in
accordance with standard inter-State transmission planning norms as part of the
Northern Region System Strengthening Scheme (NRSS-XVIII), and not pursuant
to any specific request or requirement of PTCUL. As per the minutes of the 23rd
SCM, the six 220 kV bays at the 400 kV substation were not exclusively planned
for PTCUL or for meeting State demand; two bays were envisaged for evacuation
of power from NHPC’s Kotlibhel HEP, while PTCUL had only internally explored
utilization of two bays for the proposed 220 kV double-circuit Mori-Dehradun line,
which plan was never finalized or implemented.
88. It is submitted that Kotlibhel HEP did not materialise, and that the Mori-
Dehradun proposal later evolved into an arrangement under which responsibilities
were allocated to PTCUL pursuant to LTA intimation dated 20.12.2018 and
tripartite LTA agreement dated 31.01.2020, which was itself revisited in the 3rd
NRPC (Transmission Planning) meeting on 19.02.2021 contemplating Central
Sector implementation subject to materialisation of generation projects in the
Yamuna basin. Under these circumstances, the Appellant contends that the
subject bays were planned as part of a broader regional and
generation-evacuation framework, and that their cost ought to be borne by regional
beneficiaries through the PoC mechanism rather than being exclusively saddled
on PTCUL.
89. It is further submitted that ISTS assets developed under
system-strengthening schemes are intended to serve the entire grid, and that
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under the 2010 Sharing Regulations, as clarified by the Second Amendment to the
Sharing Regulations, 2020, recovery of such charges is to be through pooled or
component-based allocation, including from the relevant Drawee DIC (UPCL),
rather than through unilateral billing upon PTCUL. The Appellant points out that
PGCIL’s own subsequent conduct in ceasing billing upon PTCUL from December
2023 and seeking recovery through the PoC pool is consistent with this position
and undermines any claim that the bays were always meant to be exclusively
chargeable to PTCUL.
Submissions of PGCIL
90. PGCIL submits that Asset-III (the subject bays), conceptualised and
approved as part of NRSS-XVIII in the 23rd SCM, is distinct and independent from
the transmission network associated with the 60 MW Naitwar Mori HEP, which was
planned much later. LTA intimation for Naitwar Mori was issued only on
20.12.2018, nearly a decade after planning of Asset-III, demonstrating, according
to PGCIL, that the scheme associated with Naitwar Mori and the tripartite LTA
agreement with PTCUL and SJVN are unrelated to the subject bays that form part
of NRSS-XVIII.
91. PGCIL therefore contends that it was not required to furnish LTA-related
details in the tariff proceedings for Asset-III, which were confined to determination
of tariff for NRSS-XVIII assets and not governed by the subsequent LTA
arrangement for Naitwar Mori. As regards cost allocation under the later regime,
PGCIL points out that, pursuant to the Second Amendment to the Sharing
Regulations, 2020, the subject assets have been classified under the “Transformer
Component” for Uttarakhand, with transmission charges payable by UPCL from
01.11.2023.
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92. Without prejudice, PGCIL submits that for the prior mismatch period, even if
COD were notionally aligned with downstream readiness for PoC purposes, IDC
and IEDC for the intervening period would require capitalization to ensure
legitimate cost recovery through tariff from November 2023 onwards. PGCIL thus
maintains that the Impugned Order’s allocation of liability on PTCUL for the
mismatch period is consistent with the principle that the defaulting entity bears the
financial burden of idle assets, while the subsequent PoC classification ensures
socialisation of costs prospectively.
Analysis and Conclusion
93. While analysing the Issue 1 we had gone through the MOM of various
meetings and also relevant correspondence, and we have already concluded that
it cannot be established that the bays were constructed for use by PTCUL for
connecting downstream transmission lines. The arguments of the PTCUL on the
Issue 5 and response of PGCIL thereon do not add any significant value, and
therefore our conclusion remains unchanged. In regard to specific submission of
PGCIL that subsequent to the amendment to the Sharing Regulations the charges
relatable to bays will be construed as transformer component and will be payable
by UPCL (the distribution licensee in Uttarakhand), we would not like to consider
the same in this judgement, as presently we are only dealing with the issue of
application of transmission charges to PTCUL, which has filed this appeal.
Issue 6: Whether PGCIL’s own conduct, including delay in
commissioning the bays, non-impleadment of PTCUL in initial tariff
proceedings and later tripartite LTA arrangements, operates as
estoppel against any allegation of prior binding obligation on
PTCUL?
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Submissions of PTCUL
94. The Appellant submits that PGCIL itself was responsible for an inordinate
delay in commissioning the subject bays; although the completion target was
indicated as November 2011 vide communication dated 11.06.2009, the bays were
ultimately charged only on a no-load basis on 02.02.2017. PGCIL cannot, it is
contended, be permitted to take advantage of its own delay to fasten liability upon
PTCUL; reliance on communications issued from 2013 onwards is described as
misleading and intended to wrongly attribute delay to PTCUL despite the admitted
implementation delay being attributable to PGCIL. No timelines for execution of
the substation, bays or downstream assets were ever agreed in the 23rd SCM or
any subsequent meetings, and later letters cannot retrospectively create such
obligations.
95. Furthermore, PTCUL was not impleaded in the initial tariff proceedings
relating to the subject bays, which, according to the Appellant, demonstrates that
PGCIL itself did not consider PTCUL as a responsible party for utilization of the
bays at that stage. PGCIL independently commissioned the bays and only
thereafter raised the issue of utilization, which evidences the absence of any prior
concluded agreement binding PTCUL.
96. The Appellant also relies on PGCIL’s subsequent conduct, including entering
into a fresh tripartite LTA agreement in January 2020 with PTCUL and SJVN for
construction of new 220 kV bays for the Mori-Dehradun line, instead of insisting
on utilization of the subject bays, as contradicting any alleged prior binding
commitment and operating as estoppel. It is contended that had any earlier
obligation existed, PGCIL would not have required new bays under a fresh
contractual framework, and that the Impugned Order, by ignoring this conduct,
effectively renders the later tripartite agreement otiose.
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Submissions of PGCIL
97. PGCIL contests the allegation that its own conduct gives rise to any estoppel
and instead attributes the mismatch and non-utilisation to PTCUL’s delay. PGCIL
relies on the 34th SCM dated 08.08.2014, where PTCUL expressly indicated that
its downstream 220 kV system from Dehradun would be ready by March 2015, to
submit that the commitment regarding readiness of the downstream system came
from PTCUL.
98. PGCIL further points to subsequent SCMs (36th, 37th and 38th) and NRPC
meetings (41st and 42nd), in which the need for timely development of
downstream infrastructure was repeatedly emphasized, PTCUL was called upon
to provide status updates, and PTCUL itself identified concrete utilization plans for
the bays, including Dehradun-Naugaon, Dehradun-Selaqui and Yamuna-basin
related lines. PGCIL also relies on its letters from 2013-2017 seeking updates on
downstream connectivity, which were received without protest, and on PTCUL’s
internal correspondence acknowledging planned utilization.
99. On this basis, PGCIL submits that it consistently acted on the understanding
that PTCUL would develop the downstream system in a matching timeframe and
that PTCUL’s failure to do so, despite its own commitments and subsequent
utilisation plans, renders PTCUL the defaulting party. PGCIL therefore denies that
its conduct; whether in relation to the timing of petitions or later tripartite
arrangements; creates any estoppel against enforcing PTCUL’s liability; rather,
PGCIL contends that PTCUL’s conduct reinforces the existence of consensus and
its responsibility for the non-utilisation period.
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Analysis and Conclusions
100. In our opinion, PTCUL’s argument is founded largely on hindsight. With the
benefit of subsequent events, PTCUL now finds fault with PGCIL, fully aware that
the bays were ultimately commissioned by PGCIL after a considerable lapse of
time. However, the matter must be examined from the perspective prevailing at the
relevant point in time and not in light of facts that emerged subsequently.
101. Had the downstream transmission line (220 kV Dehradun-Jhajra line)
constructed by PTCUL been ready much earlier and the delay thereafter been
attributable to PGCIL, nothing would have prevented PTCUL from seeking
appropriate compensation or other remedies available under law. Conversely, if
PGCIL had commissioned the bays earlier, the assets would have remained
unutilised for an even longer period. Thus, the mere fact that PGCIL subsequently
delayed the commissioning of its bays cannot retrospectively alter the position that
existed when the relevant decisions were taken.
102. In these circumstances, we are unable to accept the contention of PTCUL
that PGCIL is seeking to take advantage of its own wrong. The argument is
misconceived and does not withstand scrutiny in the facts of the present case.
However, we find considerable weight in the contention of PTCUL that initially
PGCIL itself did not consider PTCUL responsible for the delays, and hence not
impleaded PTCUL as Respondent in the earlier petitions. In fact, in Petition No.
104/TT/2020, wherein the CERC passed the Impugned Order dated 31.03.2021,
PTCUL was impleaded as Respondent later, on the advice of the CERC. Further,
more urgency seems to have crept in with the order of CERC that in case of
mismatch between commissioning of two contiguous transmission system by
different licensees, the transmission charges will not be passed on to the
th
beneficiaries. This order was brought in agenda item by PGCIL in the 38 SCM
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Judgement in Appeal No. 410 of 2022
meeting held on 30.05.2016, as has already been discussed in earlier part of this
judgement under Issue 1.
103. PTCUL has further contended that PGCIL’s subsequent conduct is
inconsistent with its present stand. It is argued that, had PGCIL considered the
unused bays to be earmarked for use by PTCUL, it would not have entered into a
fresh agreement with SJVN and PTCUL for the creation of new bays for
termination of the Mori-Dehradun line. Rather, PGCIL would have insisted upon
the utilization of the existing unused bays.
104. The contention is essentially founded on a presumption as to what PGCIL
might have intended or believed at the relevant time. Such matters are inherently
speculative, and the material on record does not permit any conclusive finding in
that regard. More importantly, even assuming the contention to be correct, it would
not alter the conclusions independently arrived at by us in the earlier part of this
judgement. We, therefore, deem it unnecessary to delve further into this aspect.
105. In view of our analysis and conclusions so far, it is clear that the basis on
which CERC had fastened liability of transmission charges on PTCUL was not
correct. Therefore, as natural consequence of this conclusion, following issue will
arise:
Who shall bear transmission charges for the remaining four unused
bays till, they get utilised ?
106. We are remanding the matter to CERC for fresh consideration of the
aforesaid issue. However, we would like to point out that during the course of our
analysis, there is hint of some questions that would require consideration of CERC
during remand exercise:
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(i) Was it a systemic failure or inadvertence in planning exercise that there
was no clear identification of agency that will create downstream
network and there was no mention of target date in several meetings
on regional transmission planning?
(ii) Was there failure on the part of PGCIL to wholeheartedly coordinate
development of entire system, particularly as it was also wearing hat
of CTU at that point of time?
(iii) Could PGCIL have deferred the work on bays for which there was no
assured downstream system development in sight?
(iv) Whether the absence of a response from PTCUL to PGCIL’s
communications also contributed to the breakdown in coordination
efforts, inasmuch as a clarification from PTCUL might have dispelled
the uncertainty much earlier?
(v) Whether the subsequent amendments to the regulatory framework
have any impact on the incidence or determination of liability for
transmission charges relating to the unused bays?
107. The list of questions in the preceding paragraph is only illustrative and CERC
will be free to consider other relevant issues while deciding on the question as to
who will bear transmission charges for the unused bays.
ORDER
For the foregoing reasons as stated above, we are of the considered view that
the captioned Appeal No. 410 of 2022 has merit and is allowed.
Accordingly, the findings and directions contained in the Order dated 31.03.2021
passed by the Central Electricity Regulatory Commission in Petition No.
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104/TT/2020, insofar as they hold only PTCUL liable for payment of transmission
charges for the unused bays are hereby set aside.
However, since the question as to who should bear the transmission charges in
respect of the four unutilized bays during the period they remained unused
survives for consideration, the matter is remanded to the Central Electricity
Regulatory Commission for fresh adjudication limited to the said issue, in
accordance with law and in the light of the observations contained in this
Judgment.
While undertaking the remand exercise, the Central Commission shall be at liberty
to examine all relevant facts and circumstances, including but not limited to the
issues identified in paragraph 106 of this Judgment, and any other factors that may
have a bearing on determination of the appropriate mechanism for recovery of
transmission charges relating to the said bays.
The Captioned Appeal and pending IAs, if any, are disposed of in the above terms.
nd
PRONOUNCED IN THE OPEN COURT ON THIS 2 DAY OF JULY, 2026
(Ajay Talegaonkar)
(Virender Bhat)
Judicial Member
REPORTABLE / NON-REPORTABLE
kns/mg/mkj/kks
Technical Member
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