Gujarat Urja Vikas Nigam Ltd. vs. Green Infra Corporate Wind Power Ltd. And Ors. Etc.

2025 INSC 922
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 14098-14101 OF 2015
GUJARAT URJA VIKAS NIGAM LIMITED ..... Appellant
Versus
GREEN INFRA CORPORATE WIND PRIVATE
LIMITED AND OTHERS ETC. ….. Respondents
J U D G M E N T
SANJAY KUMAR, J
1. Gujarat Urja Vikas Nigam Limited (GUVNL), the appellant in these
four appeals, assails the common judgment dated 28.09.2015 rendered by
the Appellate Tribunal for Electricity (APTEL), New Delhi, in Appeal Nos.
198, 199, 200 and 291 of 2014. Thereby, the APTEL confirmed the orders
dated 13.06.2014, 11.06.2014, 13.06.2014 and 20.09.2014 passed by the
Gujarat Electricity Regulatory Commission (GERC), Gandhi Nagar, in
Signature Not Verified
Petition Nos. 1239 of 2012, 1221 of 2012, 1241 of 2012 and 1365 of 2013
Digitally signed by
Deepak Guglani
Date: 2025.08.04
17:03:45 IST
Reason:
filed by Green Infra Corporate Wind Private Limited, New Delhi; Vaayu
1

(India) Power Corporation Private Limited, Daman; Green Infra Wind Power
Limited, New Delhi; and Tadas Wind Energy Private Limited, Mumbai,
respectively, viz., the four contesting respondent companies.
2. By order dated 05.05.2016, this Court requested the GERC to defer
its proceedings till the matter was finally decided and disposed of by this
Court. This order was passed in view of the fact that, pursuant to the
APTEL’s common judgment under appeal, the GERC began hearings for
determination of tariff on the petitions filed by each of the four respondent
companies. Thereafter, by order dated 03.02.2023, this Court permitted the
GERC to proceed with the tariff determination hearings subject to the
condition that no final order should be passed without the leave of this
Court. We are informed that the hearings before the GERC have concluded
but the final orders have not been pronounced owing to the aforestated
order.
3. The short issue for consideration is whether the four respondent
companies were entitled to approach the GERC for determination of the
tariff for procurement of power by GUVNL from their wind energy projects.
The GERC answered this issue in their favour and the same stood
confirmed by the APTEL. Hence, these statutory appeals.
2

4. By Order No. 1 of 2010 dated 30.01.2010, passed in exercise of the
powers conferred by Sections 61(h), 62(1)(a) and 86(1)(e) of the Electricity
Act, 2003 (for brevity, ‘the Act of 2003’), the GERC determined the tariff for
procurement of power by distribution licensees, such as GUVNL, from wind
energy projects. This order was applicable for a control period of 3 years
with effect from 11.08.2009. In consequence, all wind energy projects
commissioned during that 3-year control period were covered by this order.
One of the factors considered by the GERC for tariff determination
thereunder is ‘Depreciation’. In relation thereto, GUVNL and others had
pointed out that some of the wind energy projects availed the benefit of
‘Accelerated Depreciation’ as a tax-planning measure and if the same is
taken into account, the tariff would reduce drastically, i.e., to about 3.05 ₹
per unit, but if it is not taken into account, the tariff would be higher, working
out to 3.77 per unit. They, therefore, suggested that the GERC should
₹
specify either an average tariff of 3.50 per unit or two different tariffs for
₹
wind energy projects - (i) those which are availing the benefit of accelerated
depreciation; and (ii) those which are not availing the benefit of accelerated
depreciation. They also suggested that the wind energy projects which did
not avail accelerated depreciation benefit should be asked to submit
affidavits along with supporting documents that accelerated depreciation
3

was not being claimed by them. Upon considering these
objections/suggestions, the GERC ruled as follows: -
‘Commission’s Ruling
Depreciation is a non-cash flow expenditure and it is linked with the loan
repayment. The loan repayment period is considered by the
Commission as 10 years. Hence, the requirement of cash flow in the
initial 10 years is more to match with the loan repayment. After
considering the suggestions of the objectors, the Commission decided
to allow 6% of the capital cost per annum as depreciation for the initial
th th
10 years and 2% per annum from 11 to 25 year of the plant.
The provisions of Accelerated Depreciation are provided in the Income
Tax Act, 1961 and Rules framed thereunder. A person who qualifies
under the above statutory provisions is entitled to get benefits of the
Accelerated Depreciation. Hence, the Commission decides to determine
the tariff taking into account the benefit of accelerated depreciation
available under Income Tax Act, 1961 and Rules framed under it. Those
who do not avail of such benefit may submit petitions on case-to-case
basis.’
5. In effect, the GERC made it clear that those wind energy projects
which did not avail the benefit of accelerated depreciation under the
Income-Tax Act, 1961 (for brevity, ‘the Act of 1961’), were entitled to
approach it on a case-to-case basis for determination of tariff for the power
supplied by them to distribution licensees. As regards those wind energy
projects which did avail accelerated depreciation, the GERC took into
consideration various factors and determined the levelized tariff for wind
energy generation at ₹ 3.56 per kWh (Kilowatt-hour), a much higher tariff
than that suggested by GUVNL. The GERC also made it clear that the said
tariff took into account the benefit of accelerated depreciation under the Act
4

of 1961 and the Rules made thereunder and again reiterated that for a
project which did not get such benefit, the GERC would, on a petition filed
in that respect, determine a separate tariff taking into account all the
relevant facts. The GERC further clarified that the tariff determined at 3.56
₹
(constant) was applicable for the entire project life of 25 years, i.e., from the
st th
1 year to the 25 year, in the case of wind energy projects which availed
accelerated depreciation.
6. Section 32 of the Act of 1961 deals with depreciation of buildings,
machinery, plant or furniture, being tangible assets. Section 32(1) provides
that in the case of assets of an undertaking engaged in generation or
generation and distribution of power, such percentage on the actual cost
thereof would be allowed as depreciation to the assessee, as may be
prescribed. Rule 5 of the Income-Tax Rules, 1962 (for brevity, ‘the Rules of
1962’), deals with depreciation. Rules 5(1) and 5(1A) read thus: -

5

The second and third provisos thereunder are of relevance insofar as
‘Accelerated Depreciation’ is concerned. The provisos read as follows: -
‘Provided further that the undertaking specified in clause (i) of sub-
section (1) of section 32 of the Act may, instead of the depreciation
specified in Appendix I-A, at its option, be allowed depreciation under
sub-rule (1) read with Appendix I, if such option is exercised before the
due date for furnishing the return of income under sub-section (1) of
section 139 of the Act,
(a) for the assessment year 1998-99, in the case of an undertaking
st
which began to generate power prior to 1 day of April, 1997; and
(b) for the assessment year relevant to the previous year in which it
begins to generate power, in case of any other undertaking:
Provided also that any such option once exercised shall be final and
shall apply to all the subsequent assessment years.
’
7. Appendix I to the Rules of 1962 provides that, insofar as ‘Renewable
energy devices’ are concerned, the rate of accelerated depreciation
effective from Assessment Year 2006-2007 would be 80%. Wind mills and
specially designed devices which run on wind mills are classified as
‘Renewable energy devices’ thereunder. Thus, if a wind energy project
which began power generation after 01.04.1997 wishes to avail
acceleration depreciation of 80%, as aforestated, it is required to exercise
such option before the due date for furnishing its return of income for the
Assessment Year relevant to the previous year in which it began generation
of power.
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8. In so far as tariff determination is concerned, Section 61 of the Act of
2003 vests the Appropriate Commission, i.e., the Central Electricity
Regulatory Commission or the State Electricity Regulatory Commission,
with the power to specify the terms and conditions for determination of
tariff, guided by the factors enumerated therein under Clauses (a) to (i).
Safeguarding of consumers’ interest is one such factor but promotion of
co-generation and generation of electricity from renewable sources of
energy is also a factor. Section 62 of the Act of 2003 deals with
determination of tariff. It states that the Appropriate Commission shall
determine the tariff in accordance with the provisions of the Act of 2003 for
supply of electricity by a generating company to a distribution licensee.
Section 64 enables a generating company or licensee to apply to the
Appropriate Commission for determination of tariff under Section 62. A
detailed procedure is prescribed thereunder as to how the Commission
would then go about dealing with such an application. Once the
Commission issues a tariff order upon such an application, Section 64(6)
provides that such tariff order, unless amended or revoked, shall continue
to be in force for such period as may be specified in the tariff order. The
functions of State Electricity Regulatory Commissions, such as the GERC,
are set out in Section 86 of the Act of 2003. Section 86(1)(a) states that
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such Commission shall determine the tariff for generation, supply,
transmission and wheeling of electricity, wholesale, bulk or retail, as the
case may be, within the State. Section 86(1)(b) provides that the
Commission shall regulate electricity purchase and procurement process of
distribution licensees, including the price at which electricity shall be
procured from the generating companies or licensees or from other
sources, through agreements for purchase of power for distribution and
supply within the State.
9. This being the scheme forming the backdrop of the case, we may
now take note of relevant case law. The decision of this Court in Gujarat
1
Urja Vikas Nigam Limited vs. EMCO Limited and another pertained to
a solar energy project and determination of tariff for that project. The
GERC’s First Tariff Order, viz. , Order No. 2 of 2010, was dated 29.01.2010
and the tariff per unit was fixed thereunder by the GERC for solar energy
projects that availed the benefit of accelerated depreciation. The GERC
made it clear that, for projects not availing such benefit, it would, on a
petition in that respect, determine a separate tariff taking into account all
the relevant facts. GUVNL entered into a PPA on 09.12.2010 for purchase
of power from EMCO Ltd.’s solar energy project. While so, the Second
1
(2016) 11 SCC 182
8

Tariff Order came to be issued by the GERC on 27.01.2012 and was made
applicable to solar power projects commissioned on or after 29.01.2012.
EMCO Ltd. commissioned its project on 02.03.2012 due to some delays
and it did not avail accelerated depreciation under the Act of 1961. The
tariff under the Second Tariff Order for projects availing accelerated
depreciation was less favourable to them and the tariff payable to power
producers which did not avail such benefit was more favourable.
10. EMCO Ltd., thereupon, approached the GERC claiming entitlement
to determination of tariff under the Second Tariff Order on the ground that it
had not availed accelerated depreciation. The GERC held in its favour and
the APTEL confirmed the same, holding that the Second Tariff Order
applied as EMCO Ltd.’s project was commissioned only on 02.03.2012.
Further, as it had not availed accelerated depreciation, the APTEL held that
the tariff determined without accelerated depreciation should be applied to
it. GUVNL, thereupon, approached this Court. The case of EMCO Ltd. was
that, though it had entered into a PPA during the control period specified in
the First Tariff Order, it was not bound by the tariff mentioned therein and
was entitled to seek fixation of tariff by the GERC under the Second Tariff
Order. Per contra , GUVNL contended that the First Tariff Order was
applicable only to those projects which availed the benefit of accelerated
9

depreciation and if EMCO Ltd. did not wish to avail that benefit, it ought not
to have entered into a PPA without first seeking determination of the tariff.
GUVNL contended that, having chosen to enter into a PPA, EMCO Ltd.
could not opt for not availing accelerated depreciation at a later point of
time and claim the benefit of a more advantageous tariff under the Second
Tariff Order. GUVNL further contended that the tariff under the First Tariff
Order would not apply to only those power generating projects which, by
operation of law and not by their own violation, were not entitled to claim
accelerated depreciation.
11. Noting that neither party had contended that, in law, there was a
possibility of a power project not getting the benefit of accelerated
depreciation if it opted for it, but assuming for the sake of argument that in
law such a possibility exists, this Court observed that the construction
sought to be placed on the relevant portion of the First Tariff Order by
GUVNL could not be accepted, because it would be inherently illogical. The
relevant portion of the First Tariff Order, in this context, stated that for a
project that does not get such benefit of accelerated depreciation under the
Act of 1961, the Commission would, on a petition in that respect, determine
a separate tariff taking into account all the relevant facts. The submission of
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GUVNL as to the construction of the aforestated clause in the First Tariff
Order was accordingly rejected by this Court.
12. This Court, thereafter, dealt with the issue as to whether EMCO Ltd.
had the right to exercise its choice not to avail accelerated depreciation
after signing the PPA. This Court also considered the question as to
whether it’s right under the Act of 1961 to make such a choice could be so
exercised, resulting in a situation whereby GUVNL would be obliged under
the PPA to purchase the power generated by it for a period of 25 years
without knowing the price at which EMCO Ltd. would supply such power.
The real question, per this Court, was as to what would be the point of time
at which the power producer can exercise the right to seek the
determination of a separate tariff? It was noted that the Act of 1961 gave
the option to the power producer to avail or not to avail accelerated
depreciation and also specified the point of time at which that option was to
be exercised. However, the availability of such an option was held not to
relieve the power producer of the contractual obligations incurred under the
PPA. Significantly, no finding was recorded as to whether EMCO Ltd. had
given a commitment to GUVNL about availing accelerated depreciation. It
was also noted that the PPA contained a condition that, in case
commissioning of the project was delayed beyond 31.12.2011, GUVNL
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would pay the tariff determined by GERC for solar energy projects effective
on the date of commissioning of such project or the tariff mentioned in the
PPA, whichever was lower. This stipulation, per this Court, envisaged a
situation where EMCO Ltd. was not able to commence generation of
electricity within the control period stipulated in the First Tariff Order and
dealt with that contingency. It was, therefore, held that EMCO Ltd. could not
seek tariff fixation under the Second Tariff Order.
13. Certain observations in the above decision, taken in isolation,
undoubtedly support the GUVNL presently but the law laid down in the said
decision would have to be understood in the factual context thereof,
involving two tariff orders and a specific condition in the PPA. This aspect
was pointed out by this Court in Gujarat Urja Vikas Nigam Limited vs.
2
Tarini Infrastructure Limited and others . Therein, this Court had
occasion to consider the power of the GERC to redetermine tariff even after
execution of a PPA, incorporating a particular tariff. The question for
consideration was specifically framed as to whether the tariff fixed under a
PPA was sacrosanct or inviolable and beyond review and correction by the
GERC, which is the statutory authority for fixation of tariff under the Act of
2
(2016) 8 SCC 743
12

2003. The GERC had not conferred upon itself such power but the APTEL
disagreed and held that such power would be available to the GERC. That
is how the matter came before this Court at the behest of the GUVNL.
Tarini Infrastructure Ltd. was a power producer which had setup
hydropower projects. It entered into a PPA with GUVNL to supply power for
a period of 35 years at a determined tariff. Thereafter, it sought
enhancement of the tariff on the ground that additional infrastructure was
required to be put up by it, in the form of a transmission line over 23
kilometres instead of the originally envisaged 4 kilometres. It applied to the
GERC for redetermination of the tariff. The GERC, however, negated its
plea on the ground that once the tariff was determined and incorporated in
the PPA, there was no scope for redetermination at the unilateral request of
the power producer. In another set of appeals, redetermination of the tariff
was sought by power producer(s) therein on the ground of increase in the
price of biomass fuel but it was rejected by the GERC on a similar ground.
14. In appeal, the APTEL held that the GERC was clothed by the statute
with the power to determine the tariff and, therefore, the tariff incorporated
in a PPA was also liable to be reviewed in the light of changed
circumstances of a given case. Taking note of the statutory scheme of the
Act of 2003, this Court held that it would not be possible to hold that the
13

tariff agreed by and between the parties, though it found mention in a
contractual context, was the result of an act of volition of the parties which
can, in no case, be altered except by mutual consent. It was affirmed that
tariff determination was made in exercise of statutory powers and the same
only got incorporated in a mutual agreement between the two parties
involved. Referring to Section 86(1)(b) of the Act of 2003, this Court held
that it must lean in favour of flexibility and not read inviolability into the
terms of a PPA in so far as the tariff stipulated therein is concerned. It was
further held that it would be a sound principle of interpretation to confer
such power if public interest, dictated by surrounding events and
circumstances, required review of the tariff. Dealing with the earlier
judgment in EMCO Limited ( supra ), this Court observed that the power
producer in that case did not seek determination of a separate tariff under
the First Tariff Order, as it ought to have done, but sought tariff fixation
under the Second Tariff Order, which was wholly inapplicable to it, given the
terms of the First Tariff Order and the PPA. The decision in EMCO Limited
( supra ) was, therefore, distinguished on facts.
15. We may now note certain facts which are of particular relevance to
this adjudication. GUVNL entered into individual Power Purchase
Agreements (PPAs) with the four respondent companies. These PPAs were
14

entered into by them between June, 2010, and March, 2012, i.e., during the
3-year control period specified in Order No.1 of 2010 dated 30.01.2010
issued by the GERC and the four respondent companies also
commissioned their wind energy projects during the said control period.
Each of these PPAs contained a clause with regard to the tariff applicable
for purchase of power from the respondent companies’ wind energy
projects. For the purpose of illustration, clause 5.2 in the Power Purchase
Agreement dated 28.03.2011 pertaining to Green Infra Wind Power Limited
is extracted hereunder:
‘5.2 GUVNL shall pay a fixed rate of Rs.3.56 per kWh for delivered
energy as certified by SEA of Gujarat SLDC during the 25 years life of
the project as determined by the Commission through Order No.1 of
th
2010 dated 30 January, 2010.’
16. It is an admitted fact that the four respondent companies signed
PPAs with GUVNL with identical clauses therein. Having done so, they then
approached the GERC seeking project-wise determination of tariff, claiming
that they had not availed accelerated depreciation. This prayer was made
by them in the subject petitions filed in 2012/2013 before the GERC.
GUVNL contested their claim before the GERC, arguing that these wind
energy projects had willingly entered into PPAs with it, binding themselves
to the tariff rate of ₹ 3.56 per kWh, and were, therefore, not at liberty to seek
determination of tariff on a case-to-case basis thereafter. GUVNL asserted
15

that, in the light of the valid, binding and enforceable contracts between the
parties, embodied in the PPAs, the wind energy projects could not seek
such benefit. It further asserted that, had these projects opted for a case-to-
case specific tariff, it would not have even entered into PPAs with them. It
claimed that it had not entered into any PPAs with wind energy projects that
had not availed the benefit of accelerated depreciation and asserted that it
could not be compelled to abide by the change of mind on the part of these
wind energy projects and, thereby, be compelled to pay a higher tariff to
them on the basis of a case-to-case determination by the GERC.
17. This argument on the part of GUVNL would have been compelling,
had it simply been a commercial contract between two profit-oriented
business entities. However, we cannot lose sight of the fact that GUVNL is
an instrumentality of the State and was, therefore, bound by the policy
directives of the State. It cannot advance commercial considerations in
isolation on par with a private party, divorced from its responsibility to abide
by and further the policy objectives of the State. In that context, it would be
relevant to note the objectives underlying the Act of 2003 in relation to non-
conventional and renewable energy sources, such as wind power, solar
power, etc. Part II of the Act of 2003 is titled ‘National Electricity Policy and
Plan’. Section 3 therein provides that the Central Government shall, from
16

time to time, prepare the National Electricity Policy and tariff policy, in
consultation with the State Governments and the Authority for development
of the power system based on optimal utilization of resources such as coal,
natural gas, nuclear substances or materials, hydro and renewable sources
of energy.
18. A separate Ministry of New and Renewable Energy was setup by the
Government of India as the nodal Ministry for all matters relating to new
and renewable energy. The broad aim of this Ministry is to develop and
deploy new and renewable energy to supplement the energy requirements
of the country. Energy self-sufficiency was identified as the major driver for
developing and promoting new and renewable energy generation in the
country in the wake of the two oil shocks of 1970s; the sudden increase in
the price of oil; the uncertainties associated with its supply; and the adverse
impact on the balance of payments position.
19. In furtherance of the policy and vision of the Government of India in
relation to non-conventional renewable energy generation, the Government
of Gujarat, through its Energy and Petro-chemicals Department,
promulgated the Wind Power Policy – 2007 dated 13.06.2007. It stated
therein that it was keen on development of the renewable energy sector,
given the dwindling resources of fossil fuels; increased threat of global
17

warming; and the concerns of environmental protection. It further stated
that it was committed to having investment in clean and green energy to
reduce carbon dioxide emissions. In order to accelerate investment in this
sector, the Government of Gujarat recognized that there was a need to
extend Governmental support and, in that context, the Government
reviewed its wind power policy. This new policy was to come into effect on
20.06.2007 and remain in operation till 30.06.2012. Wind Turbine
Generators (WTGs) installed and commissioned during the operative
period were to be considered eligible for the incentives declared under the
policy for 20 years or for their life span, whichever was shorter. With regard
to sale of such energy, the policy provided that the electricity generated by
the WTGs may be sold to GUVNL and/or any distribution licensee within
the State at the rate of ₹ 3.37 per unit of electricity as per the GERC order,
as amended from time to time. The requisite PPA was to be made between
the purchaser of power and the eligible unit. Notably, the tariff of 3.37 per
₹
unit mentioned in the policy was relatable to the earlier Tariff Order of the
GERC, viz., Order No.2 of 2006 dated 11.08.2006, which was in operation
for a period of 3 years, i.e., upto 10.08.2009. Various other incentives were
offered to WTGs under the aforestated policy of the Government of
Gujarat. Thereafter, the Government of Gujarat’s Wind Power Policy-2013,
18

effective from 25.07.2013 to 31.03.2016, reaffirmed its resolve and
commitment to develop and promote wind energy projects, by offering them
various incentives.
20. In the light of the aforestated policies and directives of the
Government of Gujarat and as an instrumentality of the State, GUVNL was
bound to promote and advance the objectives of the said policy. It may be
noted that the PPAs executed by and between GUVNL and the four
respondent companies specifically referred to the approvals given by the
Gujarat Energy Development Agency (GEDA) for setting up of their wind
energy projects. One such approval letter dated 01.08.2011 issued by
GEDA in favour of Green Infra Corporate Wind Private Limited was placed
before us. Perusal thereof reflects that permission was granted to the said
company to setup two WTGs subject to the terms and conditions specified
in the Government of Gujarat’s Wind Policy, GERC orders pertaining to
wind power and the conditions stipulated in the said letter. One of the
conditions stipulated therein was that the company should enter into an
Agreement with the GUVNL/DISCOM for selling or wheeling of the
electricity generated from the Wind Farm. Though GUVNL was not the only
distribution licensee in the State of Gujarat at that point of time, we cannot
19

lose sight of the fact that, being a State-instrumentality, it was and is a
major distributor of electricity across the State of Gujarat.
21. Further, it is manifest and demonstrable from the statutory scheme
obtaining under the Act of 2003 that the price at which power is to be
procured by a distribution licensee from a generating company is not a
matter of consensus and private agreement between the parties as it is to
be fixed statutorily by the Appropriate Commission. GUVNL cannot,
therefore, fix its own price or bind a generating company to such price,
contrary to the dictum of the GERC. Significantly, in Tariff Order No. 1 of
2010 dated 30.01.2010, the GERC clearly stipulated that the levelized price
of ₹ 3.56 per kWh was to apply only to those wind energy projects that
availed the benefit of accelerated depreciation under the Act of 1961 and
the Rules of 1962.
22. Pertinently, the scheme of the Act of 1961 and the Rules of 1962
makes it clear that an assessee is required to choose the option of either
availing accelerated depreciation or normal depreciation only at the time it
files its return for the assessment year relatable to the previous year in
which it started generation of power, if the same was after 01.04.1997. This
liberty and discretion given to an assessee could not be truncated or cut-
short by GUVNL by fixing a binding price unilaterally in the PPA executed
20

long before the assessee had to statutorily choose its option, i.e., at the
time it filed its return of income for the assessment year relatable to the
previous year in which it actually started generation of power.
23. The conundrum in which a power producer is placed in this scenario
is patent. Unless it generates power and sells it to a distribution licensee
under a PPA, the power producer would not file its return of income in
relation thereto. It is only at that stage that it is required to exercise its
option to choose the rate of depreciation, but it would have already signed
a PPA as it cannot sell the power generated by it without first entering into a
PPA. In such circumstances, the tariff mentioned in the PPA would
necessarily have to be conditional and dependent upon exercise of the
statutory option by the power producer at the relevant point of time. The
situation would, however, be different if the power producer chooses its
option at the time of entering into the PPA with the distribution licensee
itself and gives a commitment to such distribution licensee that it would
only avail accelerated depreciation when the time comes and would,
therefore, be bound by the tariff fixed for power producers availing such
benefit.
24. Admittedly, GUVNL never secured any written commitments from the
four respondent companies that they would only avail accelerated
21

depreciation and would not choose to opt for the regular depreciation rate
when the time came. Without securing such commitments from them,
merely because these companies signed the PPAs with a fixed tariff which
was applicable only to those projects that availed accelerated depreciation,
GUVNL cannot take advantage of its dominant position and its PPAs so as
to bind them to the price mentioned therein for the entire life of their
projects. As pointed out earlier, GUVNL is bound to promote and give effect
to the Government’s policy of encouraging generation of power from
renewable energy sources. When the Government promulgated a policy in
that regard, offering various incentives to wind energy projects, GUVNL
cannot act contrary thereto by fixing a tariff for purchase of power from
such wind energy projects, which, on the face of it, is contrary to the
mandate of Order No.1 of 2010 dated 30.01.2010 issued by the GERC.
The said order put it beyond the pale of doubt that the tariff of 3.56 per
₹
kWh was applicable only to those wind energy projects that availed the
benefit of accelerated depreciation. GUVNL does not dispute the fact that
the four respondent companies did not avail such benefit. Ergo , the
question of applying to them the tariff that was only meant for wind energy
projects that did avail accelerated depreciation would not arise. GUVNL
cannot be guided only by its own commercial interests, like a private
22

business entity and it’s conduct, as a State-instrumentality, must be of the
standard of a model citizen. However, patently unfair treatment was sought
to be meted out by GUVNL to the respondent companies by binding them
to a rate that was wholly inapplicable to them. Such conduct, akin to a
Shylock, does not reflect positively upon GUVNL.
25. Given the circumstances obtaining in the appeals on hand and in the
light of the law laid down by this Court earlier in Tarini Infrastructure
Limited ( supra ), it is not open to GUVNL to contend that the four
respondent companies are estopped from seeking determination of tariff by
the GERC as they had willingly signed PPAs with it at the tariff fixed for
wind energy projects availing accelerated depreciation. As GUVNL failed to
obtain commitments from the respondent companies that they would only
avail accelerated depreciation at the time they had to choose that option,
GUVNL has no indefeasible right to bind them to a tariff which was
applicable only to such wind energy projects that availed accelerated
depreciation. The GERC had made it quite clear that the tariff of 3.56 per ₹
kWh would apply only to those wind energy projects that availed
accelerated depreciation. Therefore, that tariff has no application to a wind
energy project that did not avail accelerated depreciation. GUVNL cannot
apply that wholly inapplicable tariff to the respondent companies which,
23

admittedly, did not avail accelerated depreciation. The orders passed by the
GERC and the APTEL holding to this effect, therefore, do not brook any
interference.
The appeals are bereft of merit and are, accordingly, dismissed.
Order dated 03.02.2023 shall stand vacated.
Pending applications, if any, shall also stand dismissed.
................................, J
Sanjay Kumar
................................, J
Satish Chandra Sharma
August 4, 2025;
New Delhi.
24