Full Judgment Text
2025 INSC 680
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 3919 OF 2023
THE HP POWER TRANSMISSION
CORPORATION LTD. … APPELLANT
VERSUS
M/S BRUA HYDROWATT
PVT. LTD. & ORS. … RESPONDENTS
J U D G M E N T
AUGUSTINE GEORGE MASIH, J .
1. This Civil Appeal assails the Judgment dated
17.03.2023 in Appeal No. 30 of 2023 (“Impugned
Judgment”) by the Appellate Tribunal for Electricity at
New Delhi (“APTEL”) which reversed the findings
returned vide Order dated 27.12.2022, by Himachal
Pradesh Electricity Regulatory Commission at Shimla
(State Commission) in Petition No. 35 of 2022, holding
M/s Brua Hydrowatt Pvt. Ltd., Respondent No.01
herein (“BHP Ltd”) liable to bear the entire cost for Bay
Signature Not Verified
at the 66kV Switching Station at Urni (“Bay”), which
Digitally signed by
NARENDRA PRASAD
Date: 2025.05.14
17:57:03 IST
Reason:
was constructed by the HP Power Transmission
Civil Appeal No.3919 of 2023 Page 1 of 22
Corporation Limited, Appellant herein (“HPPTC Ltd”)
as per the Connection Agreement (Revised) dated
02.07.2021 “(CA dated 02.07.2021”).
2. The details of the parties before us are that the HPPTC
Ltd is a transmission licensee responsible for
executing transmission networks, including
transmission lines and sub-stations of 66kV and
above in the State of Himachal Pradesh. The BHP Ltd,
formerly known as M/s Contransys Pvt Ltd, is a
company incorporated under the Companies Act,
1956, and classified as a generating company under
Section 02 (28) of the Electricity Act, 2003.
Respondent No. 02 and Respondent No. 03, being M/s
Darjeeling Power Pvt Ltd and M/s Roura Non-
Conventional Energy Pvt Ltd respectively, are the
other generating companies engaged in hydroelectric
projects within the State of Himachal Pradesh.
Respondent No. 04 and 05 are proforma respondents,
being the State Commission and State of Himachal
Pradesh respectively.
3. The facts leading to the case are that Government of
Himachal Pradesh entered into an Implementation
Agreement with the HPPTC Ltd on 25.07.2006 to
establish the Brua Hydro Electric Project (“BHEP”),
initially with a capacity of 05 MW. The interconnection
Civil Appeal No.3919 of 2023 Page 2 of 22
was originally planned at a 33kV single circuit
transmission line at Karcham in Kinnaur district of
Himachal Pradesh. However, the Power Purchase
Agreement dated 06.04.2009 was revised through a
Supplementary Power Purchase Agreement on
09.07.2018 to increase the capacity to 09 MW at a
fixed tariff of INR 2.93 per unit. The connection at
Karcham was approved on 03.12.2010 by the
Himachal Pradesh State Electricity Board Ltd
(HPSEBL), but stood modified to be connected at Urni
instead of Karcham, allowing for the Bay in joint mode
for the three generating companies i.e. BHEP, Shaung
and Roura-II Hydro Power Project.
4. To this effect, an application for connectivity had been
submitted by the BHP Ltd on 04.07.2012 and stood
approved by the HPPTC Ltd on 18.03.2013 and
23.04.2013 leading to the Connection Agreement
dated 04.06.2014, designating Urni as the connection
point. Admittedly, the HPPTC Ltd informed the BHP
Ltd on 04.12.2015 that Bay would only be operational
after completion of the Urni-Wangtoo 66kV line and
the Wangtoo sub-station. In the interregnum, it
allowed BHP Ltd to utilize the 220kV Kahshang Bhaba
line circuit at 66kV. Further, in pursuance of direction
of the HPSEBL, the HPPTC Ltd completed a 66kV
feeder Bay at Nathpa sub-station for interim power
Civil Appeal No.3919 of 2023 Page 3 of 22
evacuation, leading to signing of Interim Power
Transmission Agreement dated 23.01.2016, requiring
the BHP Ltd to pay INR 0.14 per unit to the HPPTC
Ltd for providing interim arrangements.
5. All three generating companies i.e., BHP Ltd,
Respondent No.02 and Respondent No.03 entered into
an Internal Tripartite Agreement dated 27.12.2019
(ITA dated 27.12.2019) to allow for proportionate
sharing of transmission charges, including the cost of
Bay installed by the HPPTC Ltd at Urni. As per the
agreement, while the BHP Ltd would handle claims for
deemed generation and Operation and Maintenance
Charges (O&M Charges), the other parties to the ITA
dated 27.12.2019 i.e., Respondent No.02 and
Respondent No.03 would reimburse BHP Ltd.
6. The HPPTC Ltd and BHP Ltd then entered the CA
dated 02.07.2021 wherein, while the HPPTC Lt d was
to manage the interconnection to the State’s
Transmission Utility System, BHP Ltd was made liable
for all the payments concerned, including the
construction cost for the Bay. Subsequently, request
was made by BHP Ltd for connection to Bay, and the
HPPTC Ltd raised a demand for INR 3,42,85,447
(Rupees Three Crore Forty-Two Lakh Eighty-Five
Thousand Four Hundred Forty-Seven only) as
Civil Appeal No.3919 of 2023 Page 4 of 22
construction cost for the Bay vide Letter dated
24.01.2022.
7. Against this demand, BHP Ltd wrote to Respondent
No.02 and Respondent No.03 for the payment of their
proportionate shares. While Respondent No. 02 agreed
for transfer of payment, Respondent No. 03 responded
with their inability to do so at that point in time.
Consequently, the BHP Ltd wrote Letter dated
10.05.2022 to HPPTC Ltd stating that it is willing to
deposit the proportionate share for itself and that of
Respondent No.02, however, Respondent No.03 shall
pay its proportionate share along with interest
subsequently. This demand was rejected by the
HPPTC Ltd vide Letter dated 30.05.2022, citing the
sole liability of BHP Ltd under the CA dated
02.07.2021.
8. This prompted the BHP Ltd to move the State
Commission through Petition No. 35 of 2022 under
Section 86(1)(f) read with Section 158 and other
enabling provisions of the Electricity Act, 2003 and
Regulations 53, 68, and 70 of the Himachal Pradesh
Electricity Regulatory Commission (Conduct of
Business) Regulations, 2005.
8A. While dismissing the petition of the BHP Ltd vide
Order dated 27.12.2022, the State Commission
Civil Appeal No.3919 of 2023 Page 5 of 22
observed that BHP Ltd was acting as the lead partner
of the consortium, while it applied for the connection
for all three projects and agreed to pay the cost of
construction, additional charges, and O&M Charges to
the HPPTC Ltd, with the expectation that the amount
would be reimbursed by the Respondent No.02 and
Respondent No.03 in their proportionate shares,
which aspect of liability had been acknowledged by
them. The HPPTC Ltd, therefore, rightfully issued the
invoice(s) to the BHP Ltd, which is responsible and
liable for payment as per the agreement. Recovery, if
any, from Respondent No.02 and Respondent No.03
was an internal matter between them, and the HPPTC
Ltd had no concern. While rejecting the contention
that the HPPTC Ltd should issue separate bills or that
HPPTC Ltd must enter into separate O&M agreements
with the parties concerned, the State Commission
observed that the BHP Ltd must fulfil its obligations
under the agreements dated 27.12.2019 and
02.07.2021.
9. Aggrieved by the said Order, the BHP Ltd moved the
APTEL vide Appeal No. 30 of 2023 under Section 111
of the Electricity Act, 2003, which effected the
pronouncement of the Impugned Judgment dated
17.03.2023. APTEL, while considering the CA dated
02.07.2021, observed that the BHP Ltd was liable for
Civil Appeal No.3919 of 2023 Page 6 of 22
construction cost and O&M Charges of the Bay on
“mutually agreed terms”. A reference was also made to
the ITA dated 27.12.2019 stipulating that the costs
would be shared by the parties in proportion to their
individual capacities. Furthermore, the
Supplementary Power Purchase Agreement dated
09.07.2018 indicates that the interconnection
facilities required for the project, including switching
equipment, protection, control, and metering devices,
shall be installed and maintained by the HPPTC Ltd at
the Bay, with the costs to be shared proportionately
by the parties. The BHP Ltd had submitted that no
specific agreement for the payment of charges to the
Appellant under Clause 2.4 of the CA dated
02.07.2021 was executed, holding that, in the absence
of such an agreement, the demand for payment of the
entire Bay charges could not be imposed on it.
However, the State Commission concluded that the
BHP Ltd, acting as the lead partner, had agreed to pay
these charges, contrary to the assertion.
9A. Inclined with the assertions of the BHP Ltd, APTEL
further observed that the Clauses 2.4 and 2.5 of the
CA dated 02.07.2021 do not indicate that the BHP Ltd
agreed to pay the entire Bay charges and O&M
Charges on behalf of Respondent No.02 and
Respondent No.03, in addition to its own liabilities.
Civil Appeal No.3919 of 2023 Page 7 of 22
Furthermore, it does not address the scenario where
one of the generating companies fails to pay the Bay
charges or does not commission its project, leaving the
lead member responsible for the costs and charges of
such defaulting generating Company. Therefore, the
unilateral demand for payment of Bay charges by the
HPPTC Ltd for liability of other generating companies
is contrary to the terms of the CA dated 02.07.2021.
9B. Thereafter, APTEL examined the ITA dated 27.12.2019
and while rejecting the contentions of the HPPTC Ltd,
observed that it cannot place reliance on the said ITA
for its benefit without being a party therein as it does
not form part and parcel of the CA dated 02.07.2021,
nor does it govern the payment of Bay charges. While
concluding on the liability of the BHP Ltd, APTEL
observed that before the State Commission, the other
generating companies, i.e. Respondent No.02 and
Respondent No.03, had accepted their liability of the
proportionate Bay charges and an undertaking to that
effect being given by Respondent No. 03 should
similarly apply to the BHP Ltd, so as to not hold it
liable for share of other generating companies. The
interim arrangement for power evacuation should
cease once the BHP Ltd is connected through the Bay.
Respondent No. 03’s failure to commission its project
has led to complications, but the BHP Ltd cannot be
Civil Appeal No.3919 of 2023 Page 8 of 22
burdened with additional costs without explicit
contractual provisions. The Bay charges attributable
to Respondent No. 03 may be recovered by the HPPTC
Ltd after its project is commissioned or through other
legal remedies.
9C. Appeal No. 30 of 2023 preferred by BHP Ltd was
allowed vide Judgment dated 17.03.2023 passed by
APTEL; setting aside the Order dated 27.12.2022
passed by the State Commission. Further directions
were issued to HPPTC Ltd to provide connection to the
BHP Ltd and Respondent No.02 on payment of their
respective share of charges for the Bay.
10. This resulted in the HPPTC Ltd moving this Court
through instant Civil Appeal No. 3919 of 2023
assailing the Impugned Judgment passed by APTEL.
To press their claim, the counsels on behalf of the
HPPTC Ltd have asserted that even by virtue of the
ITA dated 27.12.2019 it was the BHP Ltd who was
liable to act on behalf of other two generating
companies and the mandate was limited to recovery of
the proportionate charges by BHP Ltd from the other
generating companies. It was solely BHP Ltd who was
designated as the sole applicant in CA dated
02.07.2021 for payment of charges and to settle
Civil Appeal No.3919 of 2023 Page 9 of 22
claims of deemed generation for the Bay to the HPPTC
Ltd. Furthermore, as a stranger to the ITA dated
27.12.2019, HPPTC Ltd cannot seek or enforce to
recover the other part of charges from Respondent
No.02 and Respondent No.03 which APTEL failed to
appreciate while directing HPPTC Ltd to do so.
11. Contesting the assertions by the HPPTC Ltd, the
counsels for the BHP Ltd submitted that in pursuance
of the Impugned Judgment, the parties entered into
an agreement for the O&M of interconnection facilities
as stipulated in Clause 2.5 of the CA dated
02.07.2021 which included provisions for a separate
arrangement for the execution, operation and
maintenance (O&M) of the Bay. Moreover,
proportionate share of liability arising as against the
BHP Ltd has been deposited and acknowledged by the
HPPTC Ltd vide Letter dated 01.04.2023 and the
connection has been provided at the Bay. Having
complied with the Impugned Judgment, the HPPTC
Ltd is now precluded from challenging it, rendering
this Civil Appeal infructuous. Moreover, separate bills
have been raised by the HPPTC Ltd for the three
generating companies vis-à-vis payment of provisional
O&M Charges for April 2023 to March 2024.
Therefore, it is asserted that the new Agreement dated
01.04.2023 supersedes the terms of ITA dated
Civil Appeal No.3919 of 2023 Page 10 of 22
27.12.2019 and reveals an acceptance on the part of
the HPPTC Ltd to treat the three projects separately.
11A. It was further contended on behalf of the BHP Ltd
that the APTEL rendered its decision after thoroughly
examining the relevant facts and circumstances and
that the Order dated 27.12.2022 as passed by the
State Commission was based on a fundamentally
erroneous interpretation of the terms and conditions
of the CA dated 02.07.2021 and other pertinent
documents.
12. In response to these contentions, it is argued on
behalf of the HPPTC Ltd that execution of O&M
Agreement is in compliance on the directions by
APTEL as it could not have risked contempt in case of
non-compliance as there was no stay on the Impugned
Judgment and same does not imply any concession on
part of the HPPTC Ltd. Moreover, the BHP Ltd has not
paid the Bay charges and while the Respondent No.02
attempted to pay its proportionate share, it was
refused by the HPPTC Ltd because it had no locus to
receive the amount owing the CA dated 02.07.2021
being only between the HPPTC Ltd and BHP Ltd and
accordingly, such a payment does not impact the
liability of the latter to pay charges for the Bay.
Civil Appeal No.3919 of 2023 Page 11 of 22
13. No submissions were made on behalf of other parties
in the instant Civil Appeal.
14. We have heard the submissions on behalf of the
parties at length.
15. Before perusing the legal conundrum of singular or
shared liability of the BHP Ltd as against the CA dated
02.07.2021, it is pertinent to analyze the provisions of
the terms negotiated and agreed to therein.
16. A bare perusal of the CA dated 02.07.2021 indicates
that Respondent No.02 and Respondent No.03. are
not privy to the agreement entered between the HPPTC
Ltd and the BHP Ltd. The HPPTC is referred to as
STU and BHP Ltd as Applicant in the CA dated
02.07.2021. The preamble of the said agreement
reads:
“STU and Applicant are hereinafter collectively
referred to as “Parties” and individually as
“Party”.
WHEREAS:
(A) The Applicant has applied to the STU for
connection of the Brua (9.00 MW) Small Hydro
Electric Project facility in joint mode with Shaung
(3.00MW) SHP and Roura-II (24.00MW) SHP to the
STU Transmission System and use of the STUs
Transmission system to transmit electricity to and
or from the Facility through the Intrastate
Transmission system.
Civil Appeal No.3919 of 2023 Page 12 of 22
(B) The STU has agreed to the connection of the
Brua (9.00 MW) Hydro Electric Project facility in
joint mode with Shaung (3.00MW) SHP and Roura-
II (24.00MW) SHP to the STU’s System and
Communication System (via the applicant’s Stie –
Related Connection Equipment) at the Connection
Point i.e. 66kV Feeder Bay at 66kV Switching
Station, Urni through 66kV S/C Line in joint mode
with Shaung and Roura-II SHPs using the (wave
length) Transmission and Communication System
of the STU, to transmit electricity as well as real
time data to and or from the facility through the
STU’s Transmission and Communication System.”
17. The General Conditions for Connectivity are laid down
in paragraph 01 of the CA dated 02.07.2021, and the
relevant obligations are as under:
“1.1 (b) The applicant, shall be responsible for
planning, design, construction, and safe and
reliable operation of its own equipments in
accordance with the Central Electricity Authority
(Technical Standards for Connectivity to the Grid)
Regulations, 2007, Central Electricity Authority
(Technical Standards for Construction of electrical
plants and electric lines) Regulations, Central
Electricity Authority (Grid Standards) Regulations,
Indian Electricity Grid Code (IEGC) and other
statutory provisions.
(c) The applicant shall provide necessary facilities
for voice & data communication for transfer of real
time operational data such as voltage, frequency,
real and reactive power flow, energy, and status
of circuit breaker & isolators positions,
transformer taps and other parameters from their
station to Data Collection Point (DCP) of STU as
per CGC/IEGC. STU shall provide access to
applicants data transfer through communication
network in case spare channels are available on
mutually agreed terms. The location of DCP of STU
shall be the nearest station connected electrically
where wideband communication capacity STU is
available.
Civil Appeal No.3919 of 2023 Page 13 of 22
Additional communication system from DCP to the
HPSLDC shall be the responsibility of STU
however its cost shall be borne by the applicant.
The responsibility of data transfer shall be that of
the applicant.”
18. On the liability to pay the charges and costs, it was
agreed in Clause 02 of the CA dated 02.07.2021 that:
“ 2 Agreement to Pay Charges and Costs
2.1 Agreement to Monthly Transmission Tariff
The applicant declares that it shall pay the Monthly
Tariff including HPSLDC charges, for use of Intra
State Transmission system, as and when long term
access, Medium-term open access or short-term open
access is availed by the applicant, in accordance
with the relevant regulations of HPERC in this
regard.
2.2 Agreement to additional costs
The applicant declares that it shall pay the cost
towards modification/alterations to the
Infrastructure of STU or Intra-State transmission
licensee/Distribution Licensee other than the STU,
as the case may be, for accommodating the
proposed connection as specified in the letter of STU
furnishing connection details.
2.3 Agreement to pay for damages
The applicant declares that it shall pay/make good
damages, if any, caused by the customer to the
property of the STU or Intra-State transmission
licensee/Distribution Licensee other than the STU,
as the case may be, which has been notified by the
STU within reasonable time of its occurrence, during
the course of control, operation and maintenance of
the equipment.
2.4 Agreement to pay Charges for construction
of Bays:
Civil Appeal No.3919 of 2023 Page 14 of 22
The applicant will execute an agreement with STU
for the erection of equipment of applicant or intra-
state transmission licensee/Distribution Licensee in
the substation premises of the STU for construction
of bays, if required. For this purpose the applicant
shall pay charges to the STU on mutually agreed
terms.
2.5 Agreement to pay O&M Charges:
The applicant shall pay O&M charges to the STU on
mutually agreed terms for the bay equipment of
applicant being operated & maintained by the STU
in their substation. These O&M charges will be
governed time to time as per the mutually agreed
terms.”
19. BHP Ltd has asserted that the ITA dated 27.12.2019
is relevant to the terms and conditions of the CA dated
02.07.2021 and also forms a part while interpreting
the latter. On that note, the relevant terms of the
former agreement between the three generating
companies i.e., the BHP Ltd, Respondent No.02 and
Respondent No.03 are as follows:
1. That all the IPPs shall pool in the power to
be generated from their generating stations at the
common 66kV terminal bay at proposed
66/220kV sub-station at Urni of HPPTCL in
District Kinnaur, Himachal Pradesh.
2. That the entire cost of common 66kV
terminal bay including metering arrangements
required to be in place for metering purpose etc.
shall be shared by the IPPs in proportionate to
their individual generating capabilities.
4. That the cost of operation & Maintenance of
the Interconnection facilities at the HPPTCL grid
as per the claim to be raised by HPPTCL shall be
Civil Appeal No.3919 of 2023 Page 15 of 22
borne by the IPPs injecting power therein in
proportionate to the installed capacity of project.
M/s Roura Non Conventional Energy Private
Limited and M/s Darjeeling Power Private Limited
shall reimburse the proportionate O&M charges to
M/s Brua Hydro Watt (P) Limited within 15 days
of raising the bills thereof. M/s Brua Hydro Watt
(P) Limited shall ensure that the payment of O&M
charges received from M/s Roura Non
Conventional Energy Private Limited and M/s
Darjeeling Power Private Limited along with their
own share of O & M charges are deposited with
the HPPTCL within 3 days. Any claim arising out
of delayed remission of O&M charges after receipt
of the same from M/s Roura Non Conventional
Energy Private Limited and M/s Darjeeling Power
Private Limited shall be to the account of M/s
Brua Hydro Watt (P) Limited.”
5. That the IPPs jointly nominate M/s Brua
Hydro Watt (P) Limited to settle the claim, if any,
of the deemed generation of the projects with the
HPSEBL in line with the decision of HPERC in the
Case no. 254/2006, M/s Sri Sai Krishna Hydro
Energies Private Limited & Others Versus
Himachal Pradesh State Electricity Board Shimla
(Annexure-B), The internal settlement of the
deemed generation claims amongst the IPPs shall
be made in proportion to the installed capacities of
the respective IPPs.”
20. A perusal of the terms of the CA dated 02.07.2021, as
referred to above would indicate that BHP Ltd moved
an application before the HPPTC Ltd for seeking
connection to the Bay and use of the said system to
transmit electricity. This was done not only on behalf
of itself, but in joint mode with Respondent No.02 and
Respondent No.03. The said request was accepted by
the HPPTC Ltd, subject to certain conditions as had
been laid down. The relevant provision, as far as the
Civil Appeal No.3919 of 2023 Page 16 of 22
present issue is concerned, is covered by Clause 02 of
the said agreement which deals with the payment of
charges and costs.
21. As per this Clause 02, all the charges were to be paid
by the applicant therein i.e. the BHP Ltd, which
included not only the monthly tariff but the payment
of costs towards modification/alteration of
infrastructure, the other charges including the
payment of damages if caused by the customer to the
property of the HPPTC Ltd as also the charges of
construction of the Bay. Even the payment of O&M
Charges were to be made by the BHP Ltd. These
terms make it clear that the sole liability was that of
BHP Ltd not only in its individual capacity but also on
behalf of the Respondent No.02 and Respondent
No.03. It would not be out of way to mention here that
CA dated 02.07.2021 was entered into between the
HPPTC Ltd and BHP Ltd only while Respondent No.02
and Respondent No.03 were not a party to the said
agreement.
22. As has been insisted upon and asserted by the
Counsel for the BHP Ltd, the ITA dated 27.12.2019,
which had been entered into between the three
generating companies i.e., BHP Ltd, Respondent
No.02, and Respondent No.03 was an internal
arrangement between them where the HPPTC Ltd was
Civil Appeal No.3919 of 2023 Page 17 of 22
not a party. The relevant provisions of the ITA dated
27.12.2019, as have been reproduced above, leave no
manner of doubt that as per the said agreement all
three of them had agreed to pool in the power to be
generated from their respective generative stations at
Bay of the HPPTC Ltd. The entire cost of the terminal,
including metering arrangements, were to be shared
between them in proportion to their individual
generating capacities.
23. Cost of operation and maintenance of the
interconnection facilities at the grid was to be borne
by all three of them as would be raised by the HPPTC
Ltd as per their proportionate installation capacity of
the project. BHP Ltd had taken up the responsibility
to be the joint nominee for all three of them to settle
the claim, if any, of the deemed generation of projects
with the HPPTC Ltd. It clearly laid down that
Respondent No.02 and Respondent No.03 would
reimburse the proportionate amount due as per the
agreement to BHP Ltd within 15 days of raising of the
bills by the HPPTC Ltd. BHP Ltd was to ensure the
payment to be made to the HPPTC Ltd and thereafter
seek reimbursement in case of non-payment of the
amount by the other generating companies within the
time stipulated. What, therefore, turns out is that the
primary responsibility had been taken upon itself by
BHP Ltd, taking the lead for the other two generating
Civil Appeal No.3919 of 2023 Page 18 of 22
companies and thereafter recover the proportionate
amount as per the respective installed capacity of the
project of the other two generating companies i.e.
Respondent No.02 and Respondent No.03.
24. Liability, if any, being therefore upon BHP Ltd as per
the CA dated 02.07.2021 with HPPTC Ltd not being a
party to ITA dated 27.12.2019, the latter could not
have and cannot claim proportionate shares as per the
installed capacity of the project from Respondent
No.02 and Respondent No.03. The right, if any, of the
claim and recovery of the liability from Respondent
No.02 and Respondent No.03 would be only with BHP
Ltd. The HPPTC Ltd, therefore, has rightly put forth its
claim to BHP Ltd.
25. Having considered the provisions of the
contracts/agreements as above, we should ideally be
considerate of the impact of the liability of the charges
under the CA dated 02.07.2021, if so imposed on
Respondent No.02 and Respondent No.03 through
existing legal doctrines and decisions of the Courts.
26. The Doctrine of Privity, as originally introduced in the
1
decision of Tweddle v. Atkinson and acknowledged
by the Privy Council in Jamna Das v. Pandit Ram
1
(1861) 121 ER 762
Civil Appeal No.3919 of 2023 Page 19 of 22
2
Autar Pande and others , still holds relevance when
it comes to contractual rights and obligations of
parties inter se . In a similar factual backdrop, as in
this case, vis-à-vis relationship between the parties
and their ability to sue for recovery thereof, a three-
Judge Bench of this Court in Essar Oil Limited v.
3
Hindustan Shipyard Limited and Others denied
the Appellant therein, to sue ONGC for recovery of
payment in its capacity as a sub-contractor, as it was
not privy to the contract between the ONGC and
Respondent-Contractor. Their reliance on some direct
payments made to it by ONGC were observed to be not
sufficient to establish privity of contract.
27. In the light of the above legal position, if the
contentions of the BHP Ltd are accepted by this Court,
HPPTC Ltd would technically have no legal remedy to
recover its dues or other charges from Respondent
No.02 and Respondent No.03 in event of a default as
they are not under any contractual obligation to
discharge any liability towards the HPPTC Ltd vis-à-
vis the Bay.
28. Therefore, it is our opinion that the APTEL was
incorrect in not considering the absence of privity of
Respondent No.02 and Respondent No.03 to the CA
2
1911 SCC OnLine PC 35
3
(2015) 10 SCC 642
Civil Appeal No.3919 of 2023 Page 20 of 22
dated 02.07.2021, especially when it went on to
observe that the ITA dated 27.12.2019 cannot be
relied upon by the HPPTC Ltd for its contentions as it
does not form part and parcel of the CA dated
02.07.2021. An equivalence should have then been
drawn by the APTEL to consider the fact that
Respondent No.02 and Respondent No.03, although
beneficiaries to the liability of the HPPTC Ltd to
construct, operate and maintain the Bay through the
CA dated 02.07.2021, could not have been held liable
for the charges when explicit wording in the CA dated
02.07.2021 only binds BHP Ltd for the payment of
concerned cost and charges.
29. If that be so, as per the terms of agreement, the
Impugned Judgment of the APTEL is based upon
wrong assumptions and misreading of the terms of
agreement ignoring the basic principle that a party not
privity to the agreement or contract cannot be, unless
the context otherwise makes it apparent, made liable
for any term(s) and condition(s) unrelated to it.
30. Accordingly, the decision rendered by the State
Commission is good in law, and the observations
herein above mandate that the Impugned Judgment
as passed by the APTEL be set aside.
Civil Appeal No.3919 of 2023 Page 21 of 22
31. Therefore, the instant Appeal is allowed in favour of
the HPPTC Ltd to the effect that the Impugned
Judgment dated 17.03.2023 passed by the APTEL is
set aside and the Order dated 27.12.2022 passed by
the State Commission is restored.
32. There shall be no order as to costs.
33. Pending application(s), if any, stand disposed of.
……...……….……………………..J.
[ ABHAY S. OKA ]
……..………..……………………..J.
[ AUGUSTINE GEORGE MASIH ]
NEW DELHI;
MAY 14, 2025
Civil Appeal No.3919 of 2023 Page 22 of 22
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 3919 OF 2023
THE HP POWER TRANSMISSION
CORPORATION LTD. … APPELLANT
VERSUS
M/S BRUA HYDROWATT
PVT. LTD. & ORS. … RESPONDENTS
J U D G M E N T
AUGUSTINE GEORGE MASIH, J .
1. This Civil Appeal assails the Judgment dated
17.03.2023 in Appeal No. 30 of 2023 (“Impugned
Judgment”) by the Appellate Tribunal for Electricity at
New Delhi (“APTEL”) which reversed the findings
returned vide Order dated 27.12.2022, by Himachal
Pradesh Electricity Regulatory Commission at Shimla
(State Commission) in Petition No. 35 of 2022, holding
M/s Brua Hydrowatt Pvt. Ltd., Respondent No.01
herein (“BHP Ltd”) liable to bear the entire cost for Bay
Signature Not Verified
at the 66kV Switching Station at Urni (“Bay”), which
Digitally signed by
NARENDRA PRASAD
Date: 2025.05.14
17:57:03 IST
Reason:
was constructed by the HP Power Transmission
Civil Appeal No.3919 of 2023 Page 1 of 22
Corporation Limited, Appellant herein (“HPPTC Ltd”)
as per the Connection Agreement (Revised) dated
02.07.2021 “(CA dated 02.07.2021”).
2. The details of the parties before us are that the HPPTC
Ltd is a transmission licensee responsible for
executing transmission networks, including
transmission lines and sub-stations of 66kV and
above in the State of Himachal Pradesh. The BHP Ltd,
formerly known as M/s Contransys Pvt Ltd, is a
company incorporated under the Companies Act,
1956, and classified as a generating company under
Section 02 (28) of the Electricity Act, 2003.
Respondent No. 02 and Respondent No. 03, being M/s
Darjeeling Power Pvt Ltd and M/s Roura Non-
Conventional Energy Pvt Ltd respectively, are the
other generating companies engaged in hydroelectric
projects within the State of Himachal Pradesh.
Respondent No. 04 and 05 are proforma respondents,
being the State Commission and State of Himachal
Pradesh respectively.
3. The facts leading to the case are that Government of
Himachal Pradesh entered into an Implementation
Agreement with the HPPTC Ltd on 25.07.2006 to
establish the Brua Hydro Electric Project (“BHEP”),
initially with a capacity of 05 MW. The interconnection
Civil Appeal No.3919 of 2023 Page 2 of 22
was originally planned at a 33kV single circuit
transmission line at Karcham in Kinnaur district of
Himachal Pradesh. However, the Power Purchase
Agreement dated 06.04.2009 was revised through a
Supplementary Power Purchase Agreement on
09.07.2018 to increase the capacity to 09 MW at a
fixed tariff of INR 2.93 per unit. The connection at
Karcham was approved on 03.12.2010 by the
Himachal Pradesh State Electricity Board Ltd
(HPSEBL), but stood modified to be connected at Urni
instead of Karcham, allowing for the Bay in joint mode
for the three generating companies i.e. BHEP, Shaung
and Roura-II Hydro Power Project.
4. To this effect, an application for connectivity had been
submitted by the BHP Ltd on 04.07.2012 and stood
approved by the HPPTC Ltd on 18.03.2013 and
23.04.2013 leading to the Connection Agreement
dated 04.06.2014, designating Urni as the connection
point. Admittedly, the HPPTC Ltd informed the BHP
Ltd on 04.12.2015 that Bay would only be operational
after completion of the Urni-Wangtoo 66kV line and
the Wangtoo sub-station. In the interregnum, it
allowed BHP Ltd to utilize the 220kV Kahshang Bhaba
line circuit at 66kV. Further, in pursuance of direction
of the HPSEBL, the HPPTC Ltd completed a 66kV
feeder Bay at Nathpa sub-station for interim power
Civil Appeal No.3919 of 2023 Page 3 of 22
evacuation, leading to signing of Interim Power
Transmission Agreement dated 23.01.2016, requiring
the BHP Ltd to pay INR 0.14 per unit to the HPPTC
Ltd for providing interim arrangements.
5. All three generating companies i.e., BHP Ltd,
Respondent No.02 and Respondent No.03 entered into
an Internal Tripartite Agreement dated 27.12.2019
(ITA dated 27.12.2019) to allow for proportionate
sharing of transmission charges, including the cost of
Bay installed by the HPPTC Ltd at Urni. As per the
agreement, while the BHP Ltd would handle claims for
deemed generation and Operation and Maintenance
Charges (O&M Charges), the other parties to the ITA
dated 27.12.2019 i.e., Respondent No.02 and
Respondent No.03 would reimburse BHP Ltd.
6. The HPPTC Ltd and BHP Ltd then entered the CA
dated 02.07.2021 wherein, while the HPPTC Lt d was
to manage the interconnection to the State’s
Transmission Utility System, BHP Ltd was made liable
for all the payments concerned, including the
construction cost for the Bay. Subsequently, request
was made by BHP Ltd for connection to Bay, and the
HPPTC Ltd raised a demand for INR 3,42,85,447
(Rupees Three Crore Forty-Two Lakh Eighty-Five
Thousand Four Hundred Forty-Seven only) as
Civil Appeal No.3919 of 2023 Page 4 of 22
construction cost for the Bay vide Letter dated
24.01.2022.
7. Against this demand, BHP Ltd wrote to Respondent
No.02 and Respondent No.03 for the payment of their
proportionate shares. While Respondent No. 02 agreed
for transfer of payment, Respondent No. 03 responded
with their inability to do so at that point in time.
Consequently, the BHP Ltd wrote Letter dated
10.05.2022 to HPPTC Ltd stating that it is willing to
deposit the proportionate share for itself and that of
Respondent No.02, however, Respondent No.03 shall
pay its proportionate share along with interest
subsequently. This demand was rejected by the
HPPTC Ltd vide Letter dated 30.05.2022, citing the
sole liability of BHP Ltd under the CA dated
02.07.2021.
8. This prompted the BHP Ltd to move the State
Commission through Petition No. 35 of 2022 under
Section 86(1)(f) read with Section 158 and other
enabling provisions of the Electricity Act, 2003 and
Regulations 53, 68, and 70 of the Himachal Pradesh
Electricity Regulatory Commission (Conduct of
Business) Regulations, 2005.
8A. While dismissing the petition of the BHP Ltd vide
Order dated 27.12.2022, the State Commission
Civil Appeal No.3919 of 2023 Page 5 of 22
observed that BHP Ltd was acting as the lead partner
of the consortium, while it applied for the connection
for all three projects and agreed to pay the cost of
construction, additional charges, and O&M Charges to
the HPPTC Ltd, with the expectation that the amount
would be reimbursed by the Respondent No.02 and
Respondent No.03 in their proportionate shares,
which aspect of liability had been acknowledged by
them. The HPPTC Ltd, therefore, rightfully issued the
invoice(s) to the BHP Ltd, which is responsible and
liable for payment as per the agreement. Recovery, if
any, from Respondent No.02 and Respondent No.03
was an internal matter between them, and the HPPTC
Ltd had no concern. While rejecting the contention
that the HPPTC Ltd should issue separate bills or that
HPPTC Ltd must enter into separate O&M agreements
with the parties concerned, the State Commission
observed that the BHP Ltd must fulfil its obligations
under the agreements dated 27.12.2019 and
02.07.2021.
9. Aggrieved by the said Order, the BHP Ltd moved the
APTEL vide Appeal No. 30 of 2023 under Section 111
of the Electricity Act, 2003, which effected the
pronouncement of the Impugned Judgment dated
17.03.2023. APTEL, while considering the CA dated
02.07.2021, observed that the BHP Ltd was liable for
Civil Appeal No.3919 of 2023 Page 6 of 22
construction cost and O&M Charges of the Bay on
“mutually agreed terms”. A reference was also made to
the ITA dated 27.12.2019 stipulating that the costs
would be shared by the parties in proportion to their
individual capacities. Furthermore, the
Supplementary Power Purchase Agreement dated
09.07.2018 indicates that the interconnection
facilities required for the project, including switching
equipment, protection, control, and metering devices,
shall be installed and maintained by the HPPTC Ltd at
the Bay, with the costs to be shared proportionately
by the parties. The BHP Ltd had submitted that no
specific agreement for the payment of charges to the
Appellant under Clause 2.4 of the CA dated
02.07.2021 was executed, holding that, in the absence
of such an agreement, the demand for payment of the
entire Bay charges could not be imposed on it.
However, the State Commission concluded that the
BHP Ltd, acting as the lead partner, had agreed to pay
these charges, contrary to the assertion.
9A. Inclined with the assertions of the BHP Ltd, APTEL
further observed that the Clauses 2.4 and 2.5 of the
CA dated 02.07.2021 do not indicate that the BHP Ltd
agreed to pay the entire Bay charges and O&M
Charges on behalf of Respondent No.02 and
Respondent No.03, in addition to its own liabilities.
Civil Appeal No.3919 of 2023 Page 7 of 22
Furthermore, it does not address the scenario where
one of the generating companies fails to pay the Bay
charges or does not commission its project, leaving the
lead member responsible for the costs and charges of
such defaulting generating Company. Therefore, the
unilateral demand for payment of Bay charges by the
HPPTC Ltd for liability of other generating companies
is contrary to the terms of the CA dated 02.07.2021.
9B. Thereafter, APTEL examined the ITA dated 27.12.2019
and while rejecting the contentions of the HPPTC Ltd,
observed that it cannot place reliance on the said ITA
for its benefit without being a party therein as it does
not form part and parcel of the CA dated 02.07.2021,
nor does it govern the payment of Bay charges. While
concluding on the liability of the BHP Ltd, APTEL
observed that before the State Commission, the other
generating companies, i.e. Respondent No.02 and
Respondent No.03, had accepted their liability of the
proportionate Bay charges and an undertaking to that
effect being given by Respondent No. 03 should
similarly apply to the BHP Ltd, so as to not hold it
liable for share of other generating companies. The
interim arrangement for power evacuation should
cease once the BHP Ltd is connected through the Bay.
Respondent No. 03’s failure to commission its project
has led to complications, but the BHP Ltd cannot be
Civil Appeal No.3919 of 2023 Page 8 of 22
burdened with additional costs without explicit
contractual provisions. The Bay charges attributable
to Respondent No. 03 may be recovered by the HPPTC
Ltd after its project is commissioned or through other
legal remedies.
9C. Appeal No. 30 of 2023 preferred by BHP Ltd was
allowed vide Judgment dated 17.03.2023 passed by
APTEL; setting aside the Order dated 27.12.2022
passed by the State Commission. Further directions
were issued to HPPTC Ltd to provide connection to the
BHP Ltd and Respondent No.02 on payment of their
respective share of charges for the Bay.
10. This resulted in the HPPTC Ltd moving this Court
through instant Civil Appeal No. 3919 of 2023
assailing the Impugned Judgment passed by APTEL.
To press their claim, the counsels on behalf of the
HPPTC Ltd have asserted that even by virtue of the
ITA dated 27.12.2019 it was the BHP Ltd who was
liable to act on behalf of other two generating
companies and the mandate was limited to recovery of
the proportionate charges by BHP Ltd from the other
generating companies. It was solely BHP Ltd who was
designated as the sole applicant in CA dated
02.07.2021 for payment of charges and to settle
Civil Appeal No.3919 of 2023 Page 9 of 22
claims of deemed generation for the Bay to the HPPTC
Ltd. Furthermore, as a stranger to the ITA dated
27.12.2019, HPPTC Ltd cannot seek or enforce to
recover the other part of charges from Respondent
No.02 and Respondent No.03 which APTEL failed to
appreciate while directing HPPTC Ltd to do so.
11. Contesting the assertions by the HPPTC Ltd, the
counsels for the BHP Ltd submitted that in pursuance
of the Impugned Judgment, the parties entered into
an agreement for the O&M of interconnection facilities
as stipulated in Clause 2.5 of the CA dated
02.07.2021 which included provisions for a separate
arrangement for the execution, operation and
maintenance (O&M) of the Bay. Moreover,
proportionate share of liability arising as against the
BHP Ltd has been deposited and acknowledged by the
HPPTC Ltd vide Letter dated 01.04.2023 and the
connection has been provided at the Bay. Having
complied with the Impugned Judgment, the HPPTC
Ltd is now precluded from challenging it, rendering
this Civil Appeal infructuous. Moreover, separate bills
have been raised by the HPPTC Ltd for the three
generating companies vis-à-vis payment of provisional
O&M Charges for April 2023 to March 2024.
Therefore, it is asserted that the new Agreement dated
01.04.2023 supersedes the terms of ITA dated
Civil Appeal No.3919 of 2023 Page 10 of 22
27.12.2019 and reveals an acceptance on the part of
the HPPTC Ltd to treat the three projects separately.
11A. It was further contended on behalf of the BHP Ltd
that the APTEL rendered its decision after thoroughly
examining the relevant facts and circumstances and
that the Order dated 27.12.2022 as passed by the
State Commission was based on a fundamentally
erroneous interpretation of the terms and conditions
of the CA dated 02.07.2021 and other pertinent
documents.
12. In response to these contentions, it is argued on
behalf of the HPPTC Ltd that execution of O&M
Agreement is in compliance on the directions by
APTEL as it could not have risked contempt in case of
non-compliance as there was no stay on the Impugned
Judgment and same does not imply any concession on
part of the HPPTC Ltd. Moreover, the BHP Ltd has not
paid the Bay charges and while the Respondent No.02
attempted to pay its proportionate share, it was
refused by the HPPTC Ltd because it had no locus to
receive the amount owing the CA dated 02.07.2021
being only between the HPPTC Ltd and BHP Ltd and
accordingly, such a payment does not impact the
liability of the latter to pay charges for the Bay.
Civil Appeal No.3919 of 2023 Page 11 of 22
13. No submissions were made on behalf of other parties
in the instant Civil Appeal.
14. We have heard the submissions on behalf of the
parties at length.
15. Before perusing the legal conundrum of singular or
shared liability of the BHP Ltd as against the CA dated
02.07.2021, it is pertinent to analyze the provisions of
the terms negotiated and agreed to therein.
16. A bare perusal of the CA dated 02.07.2021 indicates
that Respondent No.02 and Respondent No.03. are
not privy to the agreement entered between the HPPTC
Ltd and the BHP Ltd. The HPPTC is referred to as
STU and BHP Ltd as Applicant in the CA dated
02.07.2021. The preamble of the said agreement
reads:
“STU and Applicant are hereinafter collectively
referred to as “Parties” and individually as
“Party”.
WHEREAS:
(A) The Applicant has applied to the STU for
connection of the Brua (9.00 MW) Small Hydro
Electric Project facility in joint mode with Shaung
(3.00MW) SHP and Roura-II (24.00MW) SHP to the
STU Transmission System and use of the STUs
Transmission system to transmit electricity to and
or from the Facility through the Intrastate
Transmission system.
Civil Appeal No.3919 of 2023 Page 12 of 22
(B) The STU has agreed to the connection of the
Brua (9.00 MW) Hydro Electric Project facility in
joint mode with Shaung (3.00MW) SHP and Roura-
II (24.00MW) SHP to the STU’s System and
Communication System (via the applicant’s Stie –
Related Connection Equipment) at the Connection
Point i.e. 66kV Feeder Bay at 66kV Switching
Station, Urni through 66kV S/C Line in joint mode
with Shaung and Roura-II SHPs using the (wave
length) Transmission and Communication System
of the STU, to transmit electricity as well as real
time data to and or from the facility through the
STU’s Transmission and Communication System.”
17. The General Conditions for Connectivity are laid down
in paragraph 01 of the CA dated 02.07.2021, and the
relevant obligations are as under:
“1.1 (b) The applicant, shall be responsible for
planning, design, construction, and safe and
reliable operation of its own equipments in
accordance with the Central Electricity Authority
(Technical Standards for Connectivity to the Grid)
Regulations, 2007, Central Electricity Authority
(Technical Standards for Construction of electrical
plants and electric lines) Regulations, Central
Electricity Authority (Grid Standards) Regulations,
Indian Electricity Grid Code (IEGC) and other
statutory provisions.
(c) The applicant shall provide necessary facilities
for voice & data communication for transfer of real
time operational data such as voltage, frequency,
real and reactive power flow, energy, and status
of circuit breaker & isolators positions,
transformer taps and other parameters from their
station to Data Collection Point (DCP) of STU as
per CGC/IEGC. STU shall provide access to
applicants data transfer through communication
network in case spare channels are available on
mutually agreed terms. The location of DCP of STU
shall be the nearest station connected electrically
where wideband communication capacity STU is
available.
Civil Appeal No.3919 of 2023 Page 13 of 22
Additional communication system from DCP to the
HPSLDC shall be the responsibility of STU
however its cost shall be borne by the applicant.
The responsibility of data transfer shall be that of
the applicant.”
18. On the liability to pay the charges and costs, it was
agreed in Clause 02 of the CA dated 02.07.2021 that:
“ 2 Agreement to Pay Charges and Costs
2.1 Agreement to Monthly Transmission Tariff
The applicant declares that it shall pay the Monthly
Tariff including HPSLDC charges, for use of Intra
State Transmission system, as and when long term
access, Medium-term open access or short-term open
access is availed by the applicant, in accordance
with the relevant regulations of HPERC in this
regard.
2.2 Agreement to additional costs
The applicant declares that it shall pay the cost
towards modification/alterations to the
Infrastructure of STU or Intra-State transmission
licensee/Distribution Licensee other than the STU,
as the case may be, for accommodating the
proposed connection as specified in the letter of STU
furnishing connection details.
2.3 Agreement to pay for damages
The applicant declares that it shall pay/make good
damages, if any, caused by the customer to the
property of the STU or Intra-State transmission
licensee/Distribution Licensee other than the STU,
as the case may be, which has been notified by the
STU within reasonable time of its occurrence, during
the course of control, operation and maintenance of
the equipment.
2.4 Agreement to pay Charges for construction
of Bays:
Civil Appeal No.3919 of 2023 Page 14 of 22
The applicant will execute an agreement with STU
for the erection of equipment of applicant or intra-
state transmission licensee/Distribution Licensee in
the substation premises of the STU for construction
of bays, if required. For this purpose the applicant
shall pay charges to the STU on mutually agreed
terms.
2.5 Agreement to pay O&M Charges:
The applicant shall pay O&M charges to the STU on
mutually agreed terms for the bay equipment of
applicant being operated & maintained by the STU
in their substation. These O&M charges will be
governed time to time as per the mutually agreed
terms.”
19. BHP Ltd has asserted that the ITA dated 27.12.2019
is relevant to the terms and conditions of the CA dated
02.07.2021 and also forms a part while interpreting
the latter. On that note, the relevant terms of the
former agreement between the three generating
companies i.e., the BHP Ltd, Respondent No.02 and
Respondent No.03 are as follows:
1. That all the IPPs shall pool in the power to
be generated from their generating stations at the
common 66kV terminal bay at proposed
66/220kV sub-station at Urni of HPPTCL in
District Kinnaur, Himachal Pradesh.
2. That the entire cost of common 66kV
terminal bay including metering arrangements
required to be in place for metering purpose etc.
shall be shared by the IPPs in proportionate to
their individual generating capabilities.
4. That the cost of operation & Maintenance of
the Interconnection facilities at the HPPTCL grid
as per the claim to be raised by HPPTCL shall be
Civil Appeal No.3919 of 2023 Page 15 of 22
borne by the IPPs injecting power therein in
proportionate to the installed capacity of project.
M/s Roura Non Conventional Energy Private
Limited and M/s Darjeeling Power Private Limited
shall reimburse the proportionate O&M charges to
M/s Brua Hydro Watt (P) Limited within 15 days
of raising the bills thereof. M/s Brua Hydro Watt
(P) Limited shall ensure that the payment of O&M
charges received from M/s Roura Non
Conventional Energy Private Limited and M/s
Darjeeling Power Private Limited along with their
own share of O & M charges are deposited with
the HPPTCL within 3 days. Any claim arising out
of delayed remission of O&M charges after receipt
of the same from M/s Roura Non Conventional
Energy Private Limited and M/s Darjeeling Power
Private Limited shall be to the account of M/s
Brua Hydro Watt (P) Limited.”
5. That the IPPs jointly nominate M/s Brua
Hydro Watt (P) Limited to settle the claim, if any,
of the deemed generation of the projects with the
HPSEBL in line with the decision of HPERC in the
Case no. 254/2006, M/s Sri Sai Krishna Hydro
Energies Private Limited & Others Versus
Himachal Pradesh State Electricity Board Shimla
(Annexure-B), The internal settlement of the
deemed generation claims amongst the IPPs shall
be made in proportion to the installed capacities of
the respective IPPs.”
20. A perusal of the terms of the CA dated 02.07.2021, as
referred to above would indicate that BHP Ltd moved
an application before the HPPTC Ltd for seeking
connection to the Bay and use of the said system to
transmit electricity. This was done not only on behalf
of itself, but in joint mode with Respondent No.02 and
Respondent No.03. The said request was accepted by
the HPPTC Ltd, subject to certain conditions as had
been laid down. The relevant provision, as far as the
Civil Appeal No.3919 of 2023 Page 16 of 22
present issue is concerned, is covered by Clause 02 of
the said agreement which deals with the payment of
charges and costs.
21. As per this Clause 02, all the charges were to be paid
by the applicant therein i.e. the BHP Ltd, which
included not only the monthly tariff but the payment
of costs towards modification/alteration of
infrastructure, the other charges including the
payment of damages if caused by the customer to the
property of the HPPTC Ltd as also the charges of
construction of the Bay. Even the payment of O&M
Charges were to be made by the BHP Ltd. These
terms make it clear that the sole liability was that of
BHP Ltd not only in its individual capacity but also on
behalf of the Respondent No.02 and Respondent
No.03. It would not be out of way to mention here that
CA dated 02.07.2021 was entered into between the
HPPTC Ltd and BHP Ltd only while Respondent No.02
and Respondent No.03 were not a party to the said
agreement.
22. As has been insisted upon and asserted by the
Counsel for the BHP Ltd, the ITA dated 27.12.2019,
which had been entered into between the three
generating companies i.e., BHP Ltd, Respondent
No.02, and Respondent No.03 was an internal
arrangement between them where the HPPTC Ltd was
Civil Appeal No.3919 of 2023 Page 17 of 22
not a party. The relevant provisions of the ITA dated
27.12.2019, as have been reproduced above, leave no
manner of doubt that as per the said agreement all
three of them had agreed to pool in the power to be
generated from their respective generative stations at
Bay of the HPPTC Ltd. The entire cost of the terminal,
including metering arrangements, were to be shared
between them in proportion to their individual
generating capacities.
23. Cost of operation and maintenance of the
interconnection facilities at the grid was to be borne
by all three of them as would be raised by the HPPTC
Ltd as per their proportionate installation capacity of
the project. BHP Ltd had taken up the responsibility
to be the joint nominee for all three of them to settle
the claim, if any, of the deemed generation of projects
with the HPPTC Ltd. It clearly laid down that
Respondent No.02 and Respondent No.03 would
reimburse the proportionate amount due as per the
agreement to BHP Ltd within 15 days of raising of the
bills by the HPPTC Ltd. BHP Ltd was to ensure the
payment to be made to the HPPTC Ltd and thereafter
seek reimbursement in case of non-payment of the
amount by the other generating companies within the
time stipulated. What, therefore, turns out is that the
primary responsibility had been taken upon itself by
BHP Ltd, taking the lead for the other two generating
Civil Appeal No.3919 of 2023 Page 18 of 22
companies and thereafter recover the proportionate
amount as per the respective installed capacity of the
project of the other two generating companies i.e.
Respondent No.02 and Respondent No.03.
24. Liability, if any, being therefore upon BHP Ltd as per
the CA dated 02.07.2021 with HPPTC Ltd not being a
party to ITA dated 27.12.2019, the latter could not
have and cannot claim proportionate shares as per the
installed capacity of the project from Respondent
No.02 and Respondent No.03. The right, if any, of the
claim and recovery of the liability from Respondent
No.02 and Respondent No.03 would be only with BHP
Ltd. The HPPTC Ltd, therefore, has rightly put forth its
claim to BHP Ltd.
25. Having considered the provisions of the
contracts/agreements as above, we should ideally be
considerate of the impact of the liability of the charges
under the CA dated 02.07.2021, if so imposed on
Respondent No.02 and Respondent No.03 through
existing legal doctrines and decisions of the Courts.
26. The Doctrine of Privity, as originally introduced in the
1
decision of Tweddle v. Atkinson and acknowledged
by the Privy Council in Jamna Das v. Pandit Ram
1
(1861) 121 ER 762
Civil Appeal No.3919 of 2023 Page 19 of 22
2
Autar Pande and others , still holds relevance when
it comes to contractual rights and obligations of
parties inter se . In a similar factual backdrop, as in
this case, vis-à-vis relationship between the parties
and their ability to sue for recovery thereof, a three-
Judge Bench of this Court in Essar Oil Limited v.
3
Hindustan Shipyard Limited and Others denied
the Appellant therein, to sue ONGC for recovery of
payment in its capacity as a sub-contractor, as it was
not privy to the contract between the ONGC and
Respondent-Contractor. Their reliance on some direct
payments made to it by ONGC were observed to be not
sufficient to establish privity of contract.
27. In the light of the above legal position, if the
contentions of the BHP Ltd are accepted by this Court,
HPPTC Ltd would technically have no legal remedy to
recover its dues or other charges from Respondent
No.02 and Respondent No.03 in event of a default as
they are not under any contractual obligation to
discharge any liability towards the HPPTC Ltd vis-à-
vis the Bay.
28. Therefore, it is our opinion that the APTEL was
incorrect in not considering the absence of privity of
Respondent No.02 and Respondent No.03 to the CA
2
1911 SCC OnLine PC 35
3
(2015) 10 SCC 642
Civil Appeal No.3919 of 2023 Page 20 of 22
dated 02.07.2021, especially when it went on to
observe that the ITA dated 27.12.2019 cannot be
relied upon by the HPPTC Ltd for its contentions as it
does not form part and parcel of the CA dated
02.07.2021. An equivalence should have then been
drawn by the APTEL to consider the fact that
Respondent No.02 and Respondent No.03, although
beneficiaries to the liability of the HPPTC Ltd to
construct, operate and maintain the Bay through the
CA dated 02.07.2021, could not have been held liable
for the charges when explicit wording in the CA dated
02.07.2021 only binds BHP Ltd for the payment of
concerned cost and charges.
29. If that be so, as per the terms of agreement, the
Impugned Judgment of the APTEL is based upon
wrong assumptions and misreading of the terms of
agreement ignoring the basic principle that a party not
privity to the agreement or contract cannot be, unless
the context otherwise makes it apparent, made liable
for any term(s) and condition(s) unrelated to it.
30. Accordingly, the decision rendered by the State
Commission is good in law, and the observations
herein above mandate that the Impugned Judgment
as passed by the APTEL be set aside.
Civil Appeal No.3919 of 2023 Page 21 of 22
31. Therefore, the instant Appeal is allowed in favour of
the HPPTC Ltd to the effect that the Impugned
Judgment dated 17.03.2023 passed by the APTEL is
set aside and the Order dated 27.12.2022 passed by
the State Commission is restored.
32. There shall be no order as to costs.
33. Pending application(s), if any, stand disposed of.
……...……….……………………..J.
[ ABHAY S. OKA ]
……..………..……………………..J.
[ AUGUSTINE GEORGE MASIH ]
NEW DELHI;
MAY 14, 2025
Civil Appeal No.3919 of 2023 Page 22 of 22