Southern Power Distribution Company & Ors vs Andhra Pradesh Electricity Regulatory Commission & Anr on 16 July 2026

JUDGEMENT

PER HON’BLE MR. AJAY TALEGAONKAR, TECHNICAL MEMBER

1. The present Appeal has been filed by the Southern Power Distribution Company of Andhra Pradesh Ltd. and others (collectively referred to as the “Appellants”). The Appellants are aggrieved by the order dated 05.07.2021 passed by the Andhra Pradesh Electricity Regulatory Commission (“State Commission”) in Original Petition (O.P.) No. 20 of 2020.

2. In the Impugned Order, the State Commission dealt with the status of the Power Purchase Agreement (PPA) dated 30.03.2017 executed between Appellant No. 1- Southern Power Distribution Company of Andhra Pradesh (APSPDCL) and Respondent No. 2 (M/s. Chaitanya Projects Ltd., herein after briefly referred as M/s. Chaitanya). The State Commission declared the PPA invalid and legally unenforceable on the ground that it lacked the mandatory

statutory approval required under Section 86(1) (b) of the Electricity Act, 2003. In the same order, the State Commission, invoking Section 70 of the Contract Act, 1872, had directed APSPDCL to compensate M/s. Chaitanya for the energy injected into the grid from 30.03.2017 until the eventual date of its disconnection on 23.03.2020, calculated at a rate of ₹ 2.93 per unit. It is this limited direction that forms the subject matter of the present appeal. The Appellants have filed the current appeal against the later direction of the State Commission i.e. decree under Section 70 of the Contract Act.

3. M/s. Chaitanya established a 0.8 MW wind energy project which was commissioned on 29.03.2017. APSPDCL entered into the PPA dated 30.03.2017 with M/s. Chaitanya.

4. Thereafter, M/s. Chaitanya continued to inject electrical energy generated from its wind project into the grid. On 02.03.2020, APSPDCL issued a communication to M/s. Chaitanya stating that any power supplied would be treated as inadvertent power injected without proper consent and that no payment would be made for the same.

5. Subsequently, on 23.03.2020, the project of M/s. Chaitanya was completely disconnected from the grid. M/s. Chaitanya approached the State Commission by filing O.P. No. 20 of 2020, praying for the specific performance of the PPA and seeking payment for the power it had generated and supplied.

6. We note that similar matter for another generating company namely Vibrant Greentech India Private Limited (VGIPL) was dealt with by the State Commission in the same Impugned Order. APSPDCL and APPCC , which are the Appellants in the present case had filed similar appeal bearing No. 468 of 2022 with VGIPL. On the other hand, a cross-appeal was filed by VGPIL bearing

No. 11 of 2022, which inter-alia challenged the validity of disconnection by APSPDCL and also prayed for enhancement of the compensation granted by the State Commission.

7. When the present appeal along with the two other appeals mentioned in the previous paragraphs came up for hearing on 02.07.2026 before us, the Learned Counsel appearing on behalf of APSPDCL & Andhra Pradesh Power Coordination Committee (APPCC) which are the Appellants in present appeal as well as in Appeal No. 468 of 2022 submitted that they have already filed written submissions in Appeal Nos. 11 & 468 of 2022 and the same may be read as written submission in so far as this Appeal is concerned.

8. On the other hand, Mr. Hitendra Nath Rath, Learned Counsel for VGIPL submitted that they have already filed their written submissions in Appeal Nos. 11 & 468 of 2022. He further submitted that he has no instruction with regard to Appeal No. 456 of 2022 is concerned. He was advised to take instructions and submit the same by way of an affidavit within one week. Thereafter, the judgment was reserved in Appeal No. 456 of 2022.

9. Vide Affidavit dated 08.07.2026, Mr. Hitendra Nath Rath, Learned Counsel submitted that he had tried to contact the Respondent No. 2- M/s. Chaitanya but there is no instruction from them.

10. The question for our determination is whether a power generator can be awarded compensation under Section 70 of the Indian Contract Act, 1872 for energy injected into a grid system under the aegis of an unapproved and legally unenforceable PPA.

11. This Tribunal has already pronounced judgement on 07.07.2026 in that case under Appeal No. 11 of 2022 and Appeal No. 468 of 2022. In the aforesaid judgement, after detailed analysis, we had inter-alia upheld the decision of the State Commission to award compensation to VGPIL under Section 70 of the Contract Act.

12. In so far as issue of validity of the compensation granted by the State Commission, the said matter shares an identical factual matrix, emerges from the very same Impugned Order dated 05.07.2021 passed by the State Commission and addresses the exact same legal issues. Therefore, in the present case also, we uphold the decision of the State Commission to award compensation under Section 70 of the Contract Act.

13. The related issues which naturally arises is that in the Impugned Order, the State Commission had awarded the aforesaid compensation at the rate of ₹ 2.93 per unit. As mentioned earlier, VGPIL had filed a cross appeal No. 11 of 2022 in which prayer was to increase the compensation. In that case, after detailed analysis, we had remanded the matter to the State Commission for fresh determination of the rate of compensation.

14. However, we note that in the present proceedings, not only there is no cross appeal, but the Respondent No. 2 M/s. Chaitanya has neither appeared before us, nor any submissions have been filed on their behalf.

15. Appellate courts possess wide powers under Order XLI Rule 33 of the Code of Civil Procedure, 1908, to pass any decree or make any order which ought to have been passed, even in favour of a party who has neither preferred an appeal nor filed cross-objections, where the circumstances so warrant. However, the power is discretionary and is intended to avoid inconsistent, contradictory or

unworkable decrees and to do complete justice between the parties. Since the power under Rule 33 constitutes an exception to the general principle that a party cannot obtain a more favourable decree without preferring an appeal or filing cross-objections, it must be exercised with care and caution (Choudhary Sahu (Dead) by LRs v. State of Bihar, (1982) 1 SCC 232). Ordinarily the appellate court must not vary or reverse a decree/order in favour of a party who has not preferred any appeal; however, in exceptional cases, the Rule enables the appellate court to pass such decree or order as ought to have been passed (K. Muthuswami Gounder v. N. Palaniappa Gounder, (1998) 7 SCC 327).

16. In view of the above analysis, we have consciously decided not to remand the matter to the State Commission for fresh determination of rate of compensation.

ORDER

For the foregoing reasons as stated above, the captioned Appeal No. 456 of 2022 is disallowed.

PRONOUNCED IN THE OPEN COURT ON THIS 16th DAY OF JULY, 2026.

(Ajay Talegaonkar) Technical Member (Virender Bhat) Judicial Member

REPORTABLE / NON-REPORTABLE kns/mkj/kks