Regulations and contractual refund obligations for evacuation infrastructure development prevail over inconsistent government policy guidelines.

The Appellant commissioned a 25.7 MW Bagasse-based Co-generation project on March 6, 2015.

Under an Energy Purchase Agreement (EPA) and Government of Maharashtra (GoM) Policies, the Appellant deposited ₹414 lakhs with Respondent No. 3 (MSEDCL), of which ₹355.17 lakhs was an interest-free advance for power evacuation infrastructure.

According to the 2010 Procedural Guidelines, the Appellant sought a refund of ₹200 lakhs from MEDA (Respondent No. 5) and ₹155.17 lakhs from MSETCL (Respondent No. 4).

The Maharashtra Electricity Regulatory Commission (MERC), via orders dated July 13, 2019, and November 13, 2019, directed MEDA to refund ₹200 lakhs but rejected the claim against MSETCL, instead directing the Appellant to pay additional costs to MSETCL.

The Appellant challenged this denial of the ₹155.17 lakhs refund.

1. Whether the Appellant is entitled to a refund of the balance interest-free advance of ₹155.17 lakhs from MSETCL/MSEDCL under the terms of the EPA and State Regulations.

2. Whether statutory Regulations overrule Government Policies/Guidelines in the event of a conflict regarding infrastructure cost refunds.

The court primarily applied Regulation 17 of the MERC (Renewable Purchase Obligation, its compliance and implementation of Renewable Energy Certificate framework) Regulations, 2010, which mandates that licensees bear the cost of evacuation infrastructure beyond the interconnection point.

It further relied on Clause 4 of the EPA, which stipulates that 50% of the evacuation work costs provided as an interest-free advance by the generator must be refunded in five equal annual installments.

The Tribunal also applied the constitutional principle of "delegated legislation," asserting that Regulations framed under Section 181 of the Electricity Act, 2003, hold higher legal sanctity than executive policies or guidelines.

The Tribunal found that both Regulation 17 and Clause 4 of the EPA clearly demarcate the financial responsibility for infrastructure beyond the interconnection point to the licensee (MSETCL/MSEDCL).

The Commission erred by relying on the GoM 2010 Procedure to cap the refund, failing to recognize that the ₹355.17 lakhs claimed was already within the ₹400 lakh cap set by that very policy.

Crucially, the Tribunal noted that even if a conflict existed between the GoM Policy and the MERC Regulations, the Regulations—as delegated legislation—must prevail.

The Tribunal rejected MSETCL’s argument that it was not bound by the EPA signed with MSEDCL, noting MSETCL had accepted and utilized the ₹355.17 lakhs specifically as a "refundable interest-free advance" for the project's evacuation scheme.

Consequently, withholding the refund after the project’s commissioning was deemed unlawful.

It held that MSETCL is contractually and regulatorily obligated to refund the balance amount of ₹155.17 lakhs to the Appellant.

The Tribunal directed MSETCL to refund the entire amount within one month of the judgment.

Additionally, acknowledging that the Appellant was unlawfully deprived of its funds since 2016, the Tribunal awarded carrying costs calculated at the SBI Prime Lending Rate prevalent from March 2016 until the date of payment.