Raasi Green Earth Energy Pvt. Ltd. vs Tamil Nadu Electricity Regulatory Commission & Ors on 29 July 2026

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. In this appeal, the Appellant has assailed the order dated 2nd February, 2021 passed by the 1st Respondent – Tamil Nadu Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in DRP No. 8 of 2020 filed by the Appellant thereby refusing to grant project specific extension of the Commercial Operation Date (COD) of the Appellant’s solar power project. The Commission has also held that since the Appellant’s power project was not commissioned within 34 months from 26th September, 2017 (date of signing of the PPA between it and the 2nd Respondent), the PPA stood automatically terminated and the 2nd Respondent is entitled to relief provided under Article use 14 of the PPA to the extent of non-commissioning of the power project by the Appellant.

2. The Appellant is a company registered under Companies Act, 2013 and is engaged in the business of solar power generation as well as other allied activities.

3. Respondent No. 2 – Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) is the sole distribution licensee in the State of Tamil Nadu.

4. Brief facts of the case, relevant for the disposal of the instant appeal, are that 2nd Respondent – TANGEDCO issued a tender in the year 2017 for procurement of total capacity of 1500 MW of solar power from the developers on long-term basis. The tender was prepared and issued in line with the “Guidelines for tariff based competitive bidding process for procurement of power from grid connected solar PV power projects, 2017” dated 3rd August, 2017 issued by the Ministry of Power, Government of India as a guiding principle.

5. The Appellant also participated in the tender and was declared L-1 bidder having quoted Rs.3.47 per unit. Accordingly, Letter of Intent (LOI) dated 28th August, 2017 was issued by 2nd Respondent to the Appellant. As required under clause 5.0 of the LOI, the Appellant furnished two Performance Bank Guarantees for a total amount of Rs.20 crores and

also entered into Power Purchase Agreement dated 26th September, 2017 with the 2nd Respondent – TANGEDCO for a period of 25 years.

6. As per clause 14 of the PPA, the Appellant had to commission its power project by 25th September, 2019 i.e. within 24 months from the date of the signing of the PPA.

7. Vide notification dated 30th July, 2018, the Ministry of Finance imposed a “Safeguard Duty” (in short “SGD”) on the modules and solar panels to be imported from all developed countries such as China, Taiwan and Malaysia. The notification imposed safeguard duty beyond 25% on the advolerum value of the modules thereby increasing the price of modules by 25%.

8. The 2nd Respondent – TANGEDCO was duly informed about the imposition of safeguard duty by the Appellant vide letter dated 8th March, 2019 with the request to revise the tariff payable for the Appellant’s power project, which was rejected by the 2nd Respondent vide reply dated 15th May, 2019.

9. Subsequently, vide letter dated 28th June, 2019 addressed to the 2nd Respondent, the Appellant requested for confirmation of part commissioning of the solar power projects as it had arrangement to ensure 50% of the total PPA capacity to be ready for commissioning. Vide

another letter sent on the same date, the Appellant sought permission to evacuate power through 33/110kv level instead of 230kv level in order to expedite and complete the project. The 2nd Respondent vide reply dated 23rd July, 2019 informed the Appellant that request for part commissioning would be considered but refused to allow the petitioner to evacuate power through 33/110kv level instead of 230kv level.

10. Thereafter, the Appellant sent two letters to the 2nd Respondent seeking extension of COD of the power project on the ground of sudden imposition of safeguard duty modules imported by the Appellant, but did not receive any response to the same.

11. Feeling aggrieved by the refusal of 2nd Respondent TANGEDCO to extend COD of the solar power project by 6 months, the Appellant approached the Commission with the petition being DRP No. 8 of 2020 seeking following prayers :- “In view of the above, it is humbly prayed that this Hon'ble Court may be pleased to:

a. Grant the Petitioner a project specific extension of the COD by fifteen (15) months in respect of the Petitioner's SPG under PPA dated 26.09.2019 and thereby quash the letters dated 15.05.2019; 22.05.2019 and 23.07.2019;

b. Direct the 1 and 2nd Respondents to not encash the bank guarantees furnished by the Petitioner pursuant to the PPA dated 26.09.2017;

c. Pass such further or other orders that this Hon'ble Commission may deem fit in the facts and circumstances of the case.”

12. The petition has been disposed of by the Commission vide order dated 2nd February, 2021 which has been impugned in this appeal. The Commission has concluded as under :- “7.17.12. In this case, it is clear that the petitioner's project was not commissioned within 34 months from the date of signing PPA. Therefore, the PPA shall stand automatically terminated as per the terms of the PPA and respondent is entitled to the relief provided in clause 14 of the PPA to the extent of non-commissioning of the project.

7.17.13. Accordingly, the plea for extension of date of commissioning is rejected for the reasons stated supra. In the result, the petition is dismissed. No costs.”

13. It appears that during the pendency of the petition before the Commission, the 2nd Respondent – TANGEDCO had encashed the

Performance Bank Guarantees amounting to Rs.15 crores submitted by the Appellant. Accordingly, as per the submissions of the Learned Counsel for the Appellant, the scope of the instant appeal is limited to the question whether the 2nd Respondent – TANGEDCO is entitled to the amounts corresponding to the Bank Guarantees submitted by the Appellant.

14. We have heard Mr. Anand K. Ganesan, Learned Counsel for the Appellant and Ms. Anusha Nagarajan appearing for Respondent Nos. 2 & 3. We have also perused the written submission filed by the Learned Counsels.

15. Having regard to the submissions made by the Appellant’s Counsel that the scope of the appeal now stands limited to the issue as to whether the 2nd Respondent was entitled to appropriate amounts corresponding to the Bank Guarantees submitted by the Appellant, we find that articles 14 & 15 of the PPA are relevant for discussion on this issue which are extracted hereinbelow :- “14 (a) Part Commissioning : As per terms and conditions of the tender specification, Part Commissioning will be applicable to your project. However, Part Commissioning will be accepted by the

Distribution Licensee for minimum of 50% of the plant capacity (location wise).

b) Commissioning Schedule and Liquidated Damages for Delay in Commissioning: The solar power plant shall be commissioned on or before 24 months i.e. 25.09.2019 from the date of signing of this Power Purchase Agreement. In case of failure to achieve this milestone, Distribution Licensee shall encash the Performance Guarantee in the following manner:

Delay up to five months. The Distribution Licensee will encash the Performance Guarantee on per day basis proportionate to the capacity not commissioned within (5 months after the expiry of commissioning schedule of 24 months. In case of non-commissioning within the said 29 months, the distribution licensee will encash the entire (100%) performance bank guarantee.

Delay beyond 29 months: In case the commissioning of project is further delayed beyond 29 months and up to 34 months, the SPG shall in addition to 100% encashment of performance bank guarantee shall pay a liquidated damages to the distribution licensee a sum of Rs. 10,000/-per MWac on a per day basis in the form of BG to the extent of capacity not commissioned.

Prior to expiry of 29 months from the date of signing of PPA the SPG shall furnish an additional performance bank guarantee calculated at Rs. 10,000/- per MWac for 5 months to the distribution licensee to the extent of capacity not commissioned. In case of non-furnishing of additional performance bank guarantee the PPA shall stand terminated automatically without any notice or order.

The Maximum time period allowed for commissioning of the full project capacity with encashment of performance bank guarantee and payment of liquidated damages shall be 34 months from the date of signing of the PPA. The amount of liquidated damages shall be recovered by TANGEDCO from the payments due of project developer on account of sale of solar power to TANGEDCO. In case the commissioning of the project is delayed beyond 34 months from the date of signing of PPA the PPA capacity shall stand reduced or amended to the extent of project capacity commissioned when the PPA for the balance capacity not commissioned will stand terminated and shall be reduced from the selected project capacity. In case the project is not commissioned within the said 34 months the PPA will stand terminated automatically without any notice or order and the distribution licensee will encash the performance guarantee furnished towards liquidated damages.

15. Commercial Operation Date: The projects commissioned during the month shall be considered for payment of energy at 50% of the PPA tariff as infirm power till commercial operation date CODs. The COD shall be considered 30 days from the actual date if commissioning of the first part capacity.”

16. It is admitted case by both the parties that the PPA was executed between the Appellant and 2nd Respondent on 26th September, 2017 and, therefore, the Appellant ought to have commissioned the solar power project by 25th September, 2019 i.e. within 24 months from the date of the signing of the PPA. As per the said provision in the PPA, if the commissioning of the project is delayed beyond 24 months from the signing of the PPA and up to 29 months, the Distribution Licensees is entitled to encash the performance Bank Guarantee on per day basis proportionate to the capacity not commissioned during those five months. In case of non-commissioning of the power project within 29 months from the date of signing of the PPA the Distribution Licensees would be entitled to encash entire 100% of the Bank Guarantees and the solar power generator shall also be liable to pay liquidated damages to the DISCOM in the sum of Rs.10,000/- per MW ac on a per day basis to

the extent of capacity not commissioned. Further, in case the project is not commissioned within 34 months from the signing of the PPA, the PPA shall stand automatically terminated without any notice or order.

17. In this case, concededly the Appellant did not commission the power project within 34 months from the date of the signing of the PPA and, therefore, the 2nd Respondent became entitled to encash the entire Performance Bank Guarantee submitted by the Appellant and the Appellant also become liable to pay liquidated damages as per Article 14 of the PPA.

18. It has been argued on behalf of the Appellant that the 2nd Respondent did not suffer any loss due to non-commissioning of the power project by the Appellant and hence the respondent is liable to refund the amounts of Bank Guarantee to the Appellant. It is submitted that the contentions in this regard were raised before the Commission also during the hearing of the petition which the Commission had rejected on the grounds that these were new contentions which did not form part of the petition. It is pointed out that the Appellant had raised these contentions in its rejoinder filed before the Commission which fact has been overlooked by the Commission while passing the impugned order.

19. We have already extracted hereinabove the prayers made by the Appellant in this petition before the Commission. Since the Performance Bank Guarantee had not been encashed till the date of the filing of the petition, no prayer was made for refund of the Bank Guarantee amount. As already indicated hereinabove, the 2nd Respondent had encashed the Bank Guarantees amounting to Rs.15 crores during the pendency of the petition before the Commission. In these circumstances, the Appellant ought to have amended the petition in order to incorporate these subsequent events in the petition and to make additional prayer in the petition with regards to the refund of the Bank Guarantee amount from the 2nd Respondent. Merely, mentioning about the subsequent events in the rejoinder, without seeking amendment of petition including the prayer clause, did not suffice the requirement of law and, therefore, the Commission was right in rejecting such prayer of the Appellant as it was manifestly beyond the pleadings.

20. As discussed hereinabove, Article 14 of the PPA provides for extension of the COD of the solar power project beyond the scheduled 24 months from the date of signing of the PPA upto 34 months albeit with certain conditions which have been elaborated in paragraph No. 16 hereinabove and are not repeated here for the sake of brevity. Therefore,

no fault can be found with the action of 2nd Respondent – TANGEDCO in encashing the Performance Bank Guarantee submitted by the Appellant for the reason that the Appellant, concededly did not commission its power project, within the timelines as specified under Article 14 of the PPA. For the encashment of the Performance bank guarantees submitted by the Appellant, TANGEDCO was not required to show any loss suffered by it on account of non-commissioning of the power project by the Appellant. The moment, the delay in commissioning the power project reached beyond 24 months from the date of signing of the PPA, the encashment of performance bank guarantee triggered in as per Article 14 of the PPA.

21. It is only when the delay in commissioning of the power project is condoned and the SCOD of the project is extended on the request of the project developer on account of some force majeure event as envisaged under clause 22 of the PPA that the TANGEDCO may not be entitled to encash the Performance Bank Guarantee furnished by the Developer. In the instant case, the TANGEDCO encashed the Bank Guarantee of Appellant before the plea of Force Majeure set up by Appellant in the petition, was decided. Such encashment of Bank Guarantee appears to have been accepted by the Appellant as it neither sought amendment of

petition including the prayer clause nor filed a fresh petition in this context challenging the encashment of Bank Guarantee by TANGEDCO. Therefore, the encashment of Bank Guarantees cannot be assailed in this appeal when there were no such pleadings raised before the Commission. Appeal, being the extension of the proceedings before the Court/Forum below, has to be decided on the basis of pleadings/contentions raised therein.

22. Hence, we do not find any fault or lacunae in the impugned order of the Commission on the aspect of encashment of Bank Guarantees of the Appellant.

23. In so far as the liquidated damages are concerned, whether the Appellant is liable to pay the same to the 2nd Respondent - TANGEDCO as per Article 14 of the PPA, as held by the Commission in the impugned order, it is argued on behalf of the Appellant that Appellant cannot be asked to pay liquidated damages in the absence of any pleadings or proof on behalf of the 2nd Respondent that it suffered any loss on account of non-commissioning of the power project. It is argued that as per well- settled legal position, a stipulation of liquidated damages in the contract is a genuine pre-estimate of damages suffered in cases of breach and even if it is a genuine pre-estimate, there is requirement to prove that actual loss

has been suffered by the party seeking liquidated damages. It is argued that when there is no loss, liquidated damages cannot be granted.

24. Reliance is placed on the judgements of the Hon’ble Supreme Court in Fateh Chand v. Balkishan Das (AIR 1963 SC 1405) and Murlidhar Chiranjilal vs. Harishchandra Dwarkadas, (1962) 1 SCR 653.

25. It is argued that TANGEDCO neither claimed nor attempted to prove that any loss has been suffered by it on account of non- commissioning of the power project by the Appellant and hence, the Commission erred in proceeding to award damages to it in the absence of such proof merely on speculative basis.

26. On this aspect, it is argued on behalf of the TANGEDCO that failure on the part of the Appellant to meet its obligations to commission the power project and supply power to TANGEDCO resulted in TANGEDCO having to meet the energy shortfall from other sources which included thermal power generators. It is argued that it is extremely difficult to identify and quantify the exact loss suffered by a Distribution Licensees on account of delay or interruption in power supply under a PPA. It is pointed out that procurers like TANGEDCO have agreements with a number of generating stations for procurement of electricity and additionally, they also have to purchase power from exchanges to meet

demand fluctuations during particular times of the day and if a seller or a generating company fails to supply power or delays in supplying power from the agreed date, it is extremely difficult to ascertain the exact replacing source and to compute the cost difference in a linear fashion unlike other transactions involving movable goods. In this regard, reliance is placed upon the previous judgement of this Tribunal dated 12th January, 2015 in Lanco Kondopalli Power Ltd. vs. APERC in Appeal No. 154 of 2013.

27. The primary argument advanced on behalf of the appellant is that since the 2nd respondent has failed to prove that it suffered any loss on account of non-commissioning of the power project by the Appellant within the stipulated timeline, the Commission has erred in granting compensation to the 2nd respondent as liquidated damages. The argument is based upon Sections 73 and 74 of the Indian Contract Act, 1872 which are quoted hereinbelow: - “73. Compensation for loss or damage caused by breach of contract.—When a contract has been broken, the party who suffers by such breach is entitled to receive, from the

party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract.—When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.

Explanation.—In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account.

74. Compensation for breach of contract where penalty stipulated for.— When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.

Explanation.—A stipulation for increased interest from the date of default may be a stipulation by way of penalty. Exception.—When any person enters into any bail-bond, recognizance or other instrument of the same nature, or, under the provisions of any law, or under the orders of the Central Government or of any State Government, gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein.

Explanation.—A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested.”

28. Section 73 of the Contract Act embodies the general principle with regards to assessment of damages caused by the breach of contract and

provides that the compensation would be payable by the party committing the breach for the damages caused to the other party, which damage was anticipated by parties to be likely to occur in case of the breach of the agreement or which arose naturally in the usual course of things from such breach. Section 74 speaks of the measure of damages to be awarded in case of breach of contract where the contract itself specifies any amount to be paid in case of such breach or contains any other stipulation by way of penalty. In both the cases the measure of damages is reasonable compensation, not exceeding the amounts so specified in the contract or the penalty stipulated for, whether or not actual damage or loss is proved to have been caused by the breach.

29. Bare perusal of Section 74 would reveal that parties are free to stipulate any amount in the agreement that will be paid by the party who commits breach of the terms of the agreement i.e. defaulting party to the other party in the agreement. It further provides that the amount of liquidated damages so fixed in the agreement would be the maximum amount payable by the defaulting party and the court will not allow more than that amount fixed in the contract but may award a smaller amount depending upon the facts and circumstance of the case. In other words,

the court would award only a reasonable amount of liquidated damages even though the same are pre-estimated and spelt out in advance in the contract.

30. The Hon’ble Supreme Court has interpreted Section 74 of the Contract Act in a catena of judgements and the latest one being Kailash Nath Associates v. DDA & Anr. (2015) 4 SCC 136, the relevant paragraphs of which are reproduced hereunder: - “33. Section 74 occurs in Chapter 6 of the Indian Contract Act, 1872 which reads "Of the consequences of breach of contract". It is in fact sandwiched between Sections 73 and 75 which deal with compensation for loss or damage caused by breach of contract and compensation for damage which a party may sustain through non-fulfillment of a contract after such party rightfully rescinds such contract. It is important to note that like Sections 73 and 75, compensation is payable for breach of contract

under Section 74 only where damage or loss is caused by such breach.”

“43. On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:- 43.1 Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine preestimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases,

the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.

43.2 Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.

43.3 Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section.

43.4 The Section applies whether a person is a plaintiff or a defendant in a suit.

43.5 The sum spoken of may already be paid or be payable in future.

43.6 The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

43.7 Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application.”

31. Thus, any damage or loss suffered by a party due to breach of contract on the part of another party to the contract is a sine qua non for applicability of this section i.e. for award of liquidated damages. Even if a

sum of money is stipulated in the contract as liquidated amount payable by the defaulting party by way of damages, only reasonable compensation commensurate with the loss/damages suffered by the other party, can be awarded not exceeding the amount so specified in the contract.

32. In Maula Bux v. Union of India (1969) 2 SCC 544, the Apex court has held as under:-

6. … … … Reliance in support of this contention was placed upon the expression (used in Section 74 of the Contract Act), "the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused there by, to receive from the party who has broken the contract reasonable compensation". It is true that in every case of breach of contract the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree, and the Court is competent to award

reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of contract. But the expression "whether or not actual damage or loss is proved to have been caused thereby" is intended to cover different classes of contracts which come before the Courts. In case of breach of some contracts it may be impossible for the Court to assess compensation arising from breach, while in other cases compensation can be calculated in accordance with established rules. Where the Court is unable to assess the compensation, the sum named by the parties if it be regarded as a genuine preestimate may be taken into consideration as the measure of reasonable compensation, but not if the sum named is in the nature of a penalty. Where loss in terms of money can be determined, the party claiming

compensation must prove the loss suffered by him.”

33. In the case of Fateh Chand v. Balkishan Dass, 1963 SCC OnLine SC 49, it has been held by the Apex court as under: - “10. Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and `ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a contract containing a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court has, subject to the limit of the penalty stipulated,

jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of tile case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damages"; it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual

course of things, or which the parties knew when they made the contract, to be likely to result from the breach. …

15. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties predetermined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief' as a plaintiff. The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The jurisdiction of the court is not determined by the accidental circumstance of

the party in default being a plaintiff or a defendant in a suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the plaintiff is entitled from the defendant on breach of the contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach.”

34. It is thus well settled that the essential ingredients required to be pleaded and established by a party claiming damages on account of breach of contract are: - (a) There has been breach of contract by the other party; (b) the party complaining of such breach has suffered in injury or damage as a result of the breach of contract by the other party; and

(c) the injury suffered is proximate and direct result of the breach committed by the other party.

35. The expression “whether or not actual damage or loss is proved to have been caused thereby” occurring in Section 74 have been interpreted to mean that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount indicated in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

36. In the instant case, we find from the perusal of the impugned order of the Commission that the Commission did not venture to ascertain whether or not was any loss suffered by TANGEDCO on account of non- commissioning of the power project by the Appellant within the timeline as specified in the PPA or on account of non-supply of power by the Appellant. The Commission ought to have called upon TANGEDCO to demonstrate that any loss was suffered by it on account of default on the part of the Appellant in commissioning of the power project within the specified timeline. There is no assertion of finding in the impugned order that the case was of such nature where it was impossible on the part of the TANGEDCO to prove any damage or loss suffered by it and the

extent of liquidated amount to which it was entitled from the Appellant. In the absence of any such exercise, the Commission appears to have held in an arbitrary and cavalier manner that the Respondent No. 2 – TANGEDCO is entitled to relief provided in clause 14 of the PPA i.e. liquidated damages from the Appellant to the extent of non- commissioning of the power project. Therefore, we are of the opinion that the case deserves to be remanded back to the Commission for fresh consideration on this aspect.

Conclusion

37. In view of the above discussion, the prayer of the Appellant for refund of the Bank Guarantee amount is hereby rejected. However, we set aside the impugned order of the Commission in so far as it holds the 2nd Respondent – TANGEDCO entitled to liquidated damages from the Appellant in terms of Article 14 of the PPA to the extent of non- commissioning of the power project by the Appellant. We hereby remand the case back to the Commission for fresh consideration on the aspect and to decide, upon hearing both the parties, whether or not had the TANGEDCO suffered any loss on account of non-commissioning of the power project by the Appellant within the timelines specified in the PPA and if so, to what extent. Thereafter, the liability of the Appellant to pay liquidated damages to TANGEDCO in terms of Article 14 of the PPA shall be ascertained.

38. The appeal stands partly allowed to the extent indicated hereinabove.

Pronounced in the open court on this 29th day of July, 2026.

(Virender Bhat)

(Seema Gupta)

Judicial Member

Officiating Chairperson

✓

REPORTABLE / NON REPORTABLE

js