Power Grid Corporation of India Limited vs Central Electricity Regulatory Commission & on 6 July 2026

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The Appellant, Power Grid Corporation of India Limited is aggrieved by the order dated 24th February, 2017 passed by 1st Respondent – Central Electricity Regulatory Commission

(hereinafter referred to as “the Commission”) whereby the Commission, after partly condoning the time over run in commissioning of the eight transmission assets under Eastern Region Strengthening Scheme-III (ERSS-III) has determined tariff for these assets for 2014-19 tariff block under the provisions of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014.

2. The Appellant is a Government company and is undertaking entrusted transmission of electricity in India. It also discharges the functions of the Central Transmission Utility as provided under the Electricity Act, 2003.

3. The Appellant was entrusted the implementation of transmission system associated with ERSS-III covering establishment of seven new 400 kV sub-stations, 2 in Bihar at Lakhisarai and Banka, 2 in Jharkhand viz. Daltonganj and Chaibasa and 3 in Orissa viz. Bolangir, Keonjhar and Pandiabilli alongwith extension works in 2 existing sub-stations at Sagaram and Dubri in addition to certain transmission lines. The Investment Approval (IA) and expenditure sanction for the transmission system was accorded by the Board of Directors of the Appellant vide memo dated 7th July,

2010 at estimated cost of Rs.127280 lakhs including an IDC of Rs.8152 lakhs.

4. As per the Investment Approval, the project was scheduled to be commissioned within 28 months from the date of the said approval i.e. by 6th November, 2012. However, the assets were commissioned beyond the said scheduled date of commissioning with time over run ranging from 16 months to 36 months. The scope of the work covered under the scheme is broadly as under:-

5. “Transmission Lines:

(a) Sasaram-Daltonganj 400 kV D/C Line;

(b) Mendhasal-Uttara 400 kV D/C Line;

(c) LILO of Kahalgaon-Biharsharif 400 kV D/C Line (1st line) at Lakhisarai;

(d) LILO of Kahalgaon-Biharsharif 400 kV D/C Line (2nd line) at Banka; (e) LILO of Meramundali-Jeypore 400 kV S/C Line at Bolangir; (f) LILO of Rengali-Baripada 400 kV S/C Line at Keonjhar, (g) LILO of one circuit of Baripada-Mendhasal 400 kV D/C Line at Dubri (OTPCL);

(h) LILO of both circuits of Jamshedpur-Rourkela 400 kV D/C Transmission Line at Chaibasa (out of the two LILOs bussing of one LILO at Chaibasa, the 2nd LILO Would be routed through Chaibasa but presently not bussed at Chaibasa);

Sub-stations:

(a) 2x315 MVA, 400/220 kV sub-station at Daltonganj (New); (b) 2x315 MVA, 400/220 kV sub-station at Lakhisarai (New);

(c) 2x315 MVA, 400/220 kV sub-station at Banka (New); (d) 2x315 MVA, 400/220 kV sub-station at Bolangir (New); (e) 2x315 MVA, 400/220 kV sub-station at Keonjhar (New); (f) 2x315 MVA, 400/220 kV sub-station at Chaibasa (New); (g) 2x315 MVA, 400/220 kV sub-station at Uttara (New); (h) Extension of

kV Sasaram Sub-station (POWERGRID) and 400 kV Dubri (OTPCL) and Mendhasal Sub-station (OTPCL).”

6. The details of the assets covered in Petition No. 85 of 2015 for which transmission tariff has been determined vide the impugned order by the Commission is as below :- “4. The following assets are covered in the instant petition:- Particulars Asset-1:Combined assets of LILO of Ckt.-1 of 400 kV D/C Kahalgaon-Biharsharif at Lakhisarai alongwith associated bays; 400/132 kV 200 MVA ICT-I at Lakhisarai Sub-station alongwith associated bays; 400 kV 80 MVAR Bus Reactor alongwith associated bays at Lakhisarai Sub-station and 2 nos. 132 kV line bays at Lakhisarai Sub-station Asset-2: 400/132 kV 200 MVA ICT-Il alongwith associated bays at Lakhisarai Sub-station Asset-3: LILO of Ckt.-ll of 400 kV D/C Kahalgaon- Biharsharif at Lakhisarai alongwith associated bays with 2 nos. of 50 MVAR line reactor

Asset-4: 2 nos. 132 Line bays at Lakhisarai Sub-station Asset-5: LILO of one circuit of Jamshedpur-Rourkela 400 kV D/C Transmission line at Chaibasa Asset-6: 2 nos. 220 kV Line bays at Chaibasa Asset-7: 80 MVAR Bus Reactor alongwith associated bay at Chaibasa Sub-station Asset-8: 400/220 kV 315 MVA ICT-II alongwith associated bays at Chaibasa Sub- station

7. Vide the impugned order, the Commission has partly condoned the time over run for the subject assets which is given in the following table:- Table – A Assets COD Time over- run in commissio ning of asset Time over-run condoned Time over-run not condoned Asset-1: Combined Assets of LILO of Circuit 1- 400 kV D/C Kahalgaon- Biharsharif at Lakhisarai alongwith associated bays; 400/132 kV 200 MVA ICT-I at Lakhisarai S/s alongwith associated bays; 400 kV 80 MVAR Bus Reactor alongwith associated bays at Lakhisarai Sub- station and 2 nos. 132 kV line bays 01.04.2014 16 months 23 days months 27 days 3 months 26 days at Lakhisarai Sub- station Asset 2: 400/132 kV 200 MVA ICT- II alongwith associated bays at Lakhisarai Substation 01.06.2014 18 months 23 days months 27 days 5 months 26 days Asset- 3: LILO of Ckt.-II of 400 kV D/C Kahalgaon- Bihar sharif at Lakhisarai alongwith associated bays with 2 nos. of 50 MVAR line reactor 03.09.2014 21 months 26 days months 27 days 8 months 29 days Asset- 4: 02 nos. 132 Line bays at Lakhisarai Sub- station 29.09.2014 22 months 21 days months 27 days 9 months 24 days Asset- 5: LILO of one circuit of Jamshedpur Rourkela 400 kV D/C Transmission line at Chaibasa Substation 03.12.2014 24 months 26 days 6 months 15 days months 11 days Asset-6: 02 nos. 220 kV Line bays at Chaibasa Substation 03.12.2014 24 months 26 days 6 months 15 days months 11 days Asset- 7:

MVAR Bus Reactor alongwith associated bay at Chaibasa Sub- station 26.11.2015 36 months 19 days months 15 days months 04 days Asset- 8:_400/220 kV 315 MVA ICT-II alongwith associated bays at Chaibasa Substation 03.12.2014 24 months 26 days 6 months 15 days months 11 days

8. Feeling aggrieved by refusal of the Commission to condone full time over run and allowance of restricted IDC as well as IEDC of Rs.677.70 lakhs, the Appellant had sought review of the impugned order by way of Review Petition being bearing No. 26/RP/2017 which also came to be dismissed by the Commission vide order dated 13th March, 2019.

9. Accordingly, the Appellant has approached this Tribunal by way of the said appeal which primarily concerns the two sub-stations namely Lakhisarai sub-station covering assets 1, 2, 3 & 4 as detailed in the table extracted herein above and Chaibasa sub-station covering assets 5, 6 7 & 8.

10. With regard to the assets 1, 2, 3 & 4, the Commission has observed that the Appellant has failed to explain the intervening period between 9th August, 2010 when it wrote to the District Land Acquisition Officer requesting for acquisition of the land for power project and immediately next communication dated 2nd December, 2010 submitted in this regard by the Appellant to the District Land Acquisition Officer and accordingly refused to condone the said time over run of three months and 23 days. The Commission has also observed that the Appellant has failed to explain the period between

2nd December, 2010 and 31st March, 2012 when it received the certificate of the possession of the land and accordingly, did not condone the time over run of 12 months on this account. The Commission has also held that the Appellant has not submitted any documentary evidence for the delay between August, 2012 and 27th May, 2013 and accordingly, has refused to condone the said period of time over run.

11. Hence, as regards the assets 1, 2 3 & 4, the Commission has condoned the time over run of 12 months and 27 days, the details of which are given in the following table :- 9.8.2010 to 2.12.2010

The petitioner wrote a letter to the District Land Acquisition Officer on 9.8.2010 and the next letter was written on 2.12.2010 to the District Officer requesting for land for sub-station in Lakhisarai. The petitioner has not explained intervening period between 9.8.2010 to 2.12.2010. Hence, the time over-run of 3 months 23 days is not condoned.

2.12.2010 to 31.3.2012

The petitioner received the certificate of possession of land on 31.3.2012. It took 15 months 29 days to get the letter of possession of land. Normally, land acquisition process involves various steps like social impact assessment, expert group appraisal, preliminary notification, declaration to award, and award to possession of land by collector which the petitioner is expected to factor in the time schedule. The petitioner has not explained the period between 2.12.2010 to 31.3.2012 and it is difficult to assess the time taken at various stages of land

acquisition. As such, we are not inclined to condone time over-run of 12 months on this account. Accordingly, out of 15 months 29 days period, 3 months 29 days is condoned.

31.3.2012 to Actual possession of Land i.e. August, 2012.

Though the certificate of possession of land was received on 31.3.2012, the actual possession of the land was received only in August, 2012. It took 4 months to get possession of land. During this period, the petitioner took various steps to get possession of land and we are of the view that the delay in getting actual possession of land is beyond the control of the petitioner. Accordingly, the time delay of 4 months is condoned.

August,

to 26.9.2013

There is time over-run of 13 months 25 days. The petitioner has not submitted any documentary evidence for delay between August, 2012 to 27.5.2013. Hence, the period from August, 2012 to 27.5.2013 is not condonable.

The time period from 28.5.2013 to 26.9.2013 (4 months 28 days):- Regarding this period, the petitioner has submitted two letters dated 28.5.2013 and 26.9.2013 written to District Administration, to establish that it was pursuing the matter. On perusal of the letter dated 26.9.2013 submitted by the petitioner, it is observed that out of 1.5 acres of additional land required, 0.55 acres of land was handed over in May, 2013 and 0.95 acres of land was not handed over to the petitioner. Hence, the time over-run from the period 28.5.2013 to 26.9.2013 (4 months 28 days) is not attributable to the petitioner and is condoned. Time run over- condoned

Time over-run of 12 months and 27 days is condoned in case of Assets-1, 2, 3 and 4.

12. Similarly, in respect of asset Nos. 5, 6 & 8, the Commission has observed that the Appellant has not explained the period between 27th October, 2010 to 19th May, 2011 (6 months and 27 days) and accordingly, did not condone the same. It further observed that the Appellant has failed to explain the period from 14th December, 2011 to 14th February, 2013 through any documentary evidence and accordingly, refused to condone the said period of time over run. Accordingly, the Commission condoned the time over run of 6 months and 15 days for these asset Nos. 5, 6 & 8, the details of which are given in the following table :- 7.7.2010 to 19.5.2011

months 12 days)

Time period 7.7.2010 to 19.5.2011. The petitioner has submitted the copy of the correspondence made with the Deputy Commissioner, Chaibasa vide letters dated 25.6.2010, 22.10.2010 regarding land acquisition for construction of 400/220 kV sub-station at Chaibasa. Therefore, the time over-run of 3 months 15 days is condoned. However, the petitioner has not explained the period between 22.10.2010 to 19.5.2011 (6 Months 27 days) and hence we are of the view that the delay 6 months 27 days is attributable to the petitioner and hence it is not condoned. Accordingly, out of 10 months and 12 days, 3 months and 15 days is condoned.

19.5.2011 to 22.4.2013 Time period - 19.5.2011 to 22.4.2013. The petitioner has submitted documentary evidence explaining the months

days) action taken during the period 19.5.2011 and 20.8.2011 (3 months). Accordingly, the time over-run of 3 months is condoned.

The petitioner has not explained the period from 14.12.2011 to 16.6.2012(6 months 2 days) through any evidence and hence the time over-run of 6 months 2 days is not condoned.

The petitioner has submitted that an agreement was signed with land owners on 17.7.2012. However, the petitioner has not submitted any documentary evidence. The period from 16.6.2012 to 14.2.2013 has not been explained by the petitioner. Hence, we are not inclined to condone time over-run of 7 months 29 days on this account.

The time taken for acquisition of government land i.e. up to 31.1.2013, is subsumed in the time taken for acquisition of private land.

Time over-run condoned The time over-run of 6 months and 15 days is condoned in case of Assets-5, 6 and 8.

13. In so far as asset No. 7 is concerned, the Appellant had sought condonation of time over run of 36 months and 19 days. In this regard, the Commission has observed that the Appellant took approximately 47 months (August 2009 to June 2013) for land acquisition and the delay beyond Investment Approval was 10 months 16 days. However, the Commission condoned the delay of only 6 months and

15 days due to land acquisition. The Commission also held that the time over run of 14 months i.e. from July, 2013 to August, 2014 due to diversion of transmission line of JUSNL was beyond the control of the Appellant and accordingly condoned the same. Hence, the time over run of 20 months and 15 days was condoned in respect of asset No. 7.

14. We have heard Ms. Swapna Sheshadri, Learned Counsel for the Appellant and Mr. Mohit K. Mudgal, learned Counsel for Respondent Nos. 2 & 3. We have also perused the impugned order as well as the written submissions filed by the Learned Counsels.

15. We may note that none of the other respondents have contested the appeal. Submissions on behalf of the Appellant :

16. Learned Counsel for the Appellant submitted that there were various unforeseen and uncontrollable factors that caused the delay of 16 to 22 months in the Commission of assets 1, 2, 3 & 4 at Lakhisarai sub-station which have been overlooked by the Commission. It is submitted that the Appellant had taken all possible measures to minimize the time over run and had submitted documents in this regard to the Commission explaining the delay from

2nd November, 2009 when the request was made to district land acquisition officer for acquisition of land for the project to August, 2012 when the land was made available to the Appellant after acquisition but the Commission erroneously ignored all these documents while passing the impugned order. It was further argued that since the physical possession of the land was obtained by the Appellant in August, 2012 in which month the monsoon hit the area which severely affected the execution of land filling as well as construction of boundary wall due to water accumulation. It is submitted that the intense rain and consequent unprecedented flood like situation during the months of September, 2012 and October, 2012 severely hampered the construction work. It is submitted that the rain fall data for the corresponding period obtained from Indian Meteorological Department (IMD) was submitted along with the original petition which has been overlooked by the Commission while passing the impugned order. It is submitted that despite the delayed start in October, 2012, the Appellant completed and commissioned assets in exceptional short time frame through efficient manpower and resource management which ought to have been considered and

given weightage while passing the impugned order by the Commission.

17. In so far as assets 5, 6, 7 & 8 at Chaibasa sub-station are concerned, it is argued that the Commission has not taken into consideration the material evidence on record justifying the time over run for commissioning of these assets and erred in holding that the Appellant has not properly explained the reasons behind the delay in acquisition of public land.

18. It is pointed out that the Commission has itself vide order dated 20th September, 2017 passed in Petition No. 278/TT/2015 which was with regards to the balance assets at Chaibasa station condoned the time over run due to land acquisition process but has strangely refused to condone delay on account of same land acquisition process in the instant case. Submissions on behalf of Respondent Nos. 2 & 3 :

19. Per contra, it is argued on behalf of Respondent Nos. 2 & 3 that the Investment Approval was approved by the Appellant itself in which the Appellant claimed that the project could be finished in 28 months. As an experienced company, the Appellant must have known all possible challenges but still proposed the said time line and,

therefore, the completion of the project was within the domain of the Appellant. It is submitted that the Appellant took more than 48 months for actual commissioning of the project as compared to 28 months specified in Investment Approval for which no justifiable explanation has been given. It is submitted that the Commission has rightly held in the impugned order that the Appellant has failed to provide any satisfactory explanation and documentary evidence for the significant time over run in completion of the project within the scheduled time frame.

20. It is further argued that the Appellant has been operating as a transmission licensee since 1989 and hence in view of such extensive experience, it must be conversant with the common problems encountered during the construction of the transmission project which include land acquisition issues, right of way, impact of monsoon season etc. Being fully aware of such recurring challenges, the Appellant itself decided the completion schedule of project as 28 months and hence its failure to adhere to the scheduled time frame without any justifiable reason indicates lack of proper planning and execution of the project.

21. Relying upon the judgement of this Tribunal in Appeal No. 281 of 2014 – Power Grid Corporation of India Ltd. vs. Central Electricity Regulatory Commission, it is argued that the rains in the monsoon season and consequent water accumulation at the project site are forceable events and cannot be agitated as grounds for condonation of time over run. Our Analysis As regard Asset Nos. 1, 2, 3 & 4

22. We have already noted herein above that the Commission has condoned time over run of only 12 months and 27 days with regard to these four assets, the details of which have been given in the table in paragraph No. 11 hereinabove.

23. It was argued on behalf of the Appellant that there were various unforeseen and uncontrollable factors causing the delay of 16 to 22 months in commissioning of the assets for which documents in the form of correspondences exchanged between the Appellant and the Government authorities were submitted to the Commission which have been over-looked. With the help of the following table, the Learned Counsel tried to convince us that the delay in commissioning

of these assets occasioned despite the bona-fide efforts of the Appellant. Date Particulars Reference page in the Original Petition 85/TT/2015 02.11.2009 Request for Acquisition of land submitted by the Appellant. Reference letters dtd. 04.08.2010, 09.08.2010, 02.12.2010 & 15.02.2012 @Page Nos. 99, 100, 101 & 114 respectively. 24.11.2009 Demand Note for depositing 80% cost received. @Page No. 98. 08.03.2010 80% land cost deposited by the Appellant. Reference letter dtd. 23.02.2011 @Page No.

20.01.2011 Section notification issued by the State Govt. Reference letters dtd. 21.10.2011,15.11.2011, 20.12.2011, 13.02.2012 at @Page Nos. 107, 109, 110, 113 respectively.

21.01.2011 Section notification issued by the State Govt. 23.02.2011 Letter to the District Magistrate to expedite the process by directing the concerned officers/employees to send the proposal under sections and 17(1) for consideration of the Government. @Page No. 103. 02.03.2011 Meeting with LDO, Lakhisarai with respect to acquisition of 38.05-acre land for construction of Reference @ Page No.

104. sub-station by the Appellant. 16.03.2011 Letter from the Appellant to the District Magistrate informing that proposal under sections 7 and 17

has been submitted to the Government and requesting to initiate other necessary formalities so that after getting the approval under sections 7 and 17

(1) hearing under section 9 may be started. @Page No. 104. 19.05.2011 Approval under sections 7 and 17

from the Government. @Page No. 105. 09.07.2011 Letter from the Appellant to the Land Acquisition Officer to expedite the process under section 9 @Page No. 105. 11.07.2011 to 10.08.2011 Award made under sections 9 and 11 Reference letter dtd.15.02.2012 @ Page No. 114. 24/26.09.2011 Letter from the Appellant to the District Magistrate requesting to give necessary directions to the concerned officers for completing the remaining @Page No. 106.

procedure with respect to land acquisition. 21.10.2011 Letter from the Appellant to the District Magistrate requesting to expedite the acquisition process @Page No. 107. 31.10.2011 Letter from the Appellant to the District Magistrate requesting to take active initiative so that the construction of

kV Lakhisarai sub- station be started immediately. @Page No. 108. 15.11.2011 Letter from the Appellant to the District Magistrate requesting immediate handing over of 36.55 acre land for construction of 400/132 kV sub- station in Lakhisarai @Page No. 109. 21.11.2011 Finalization of rate Reference letter dtd.13.02.2012 @ Page No. 113. 20.12.2011 Letter of pursuance to State Govt. Authority @Page No. 110. 30.12.2011 Letter from Director, Land Acquisition, Bihar to the Collector General, @Page No. 111.

Lakhisarai to expedite the procedure of estimation and making of award so that the procedure with respect to mutation of the land in favour of the Appellant may be ensured immediately. 18.01.2012 Letter from the Appellant to the District Land Acquisition Officer requesting to calculate the estimate of total 36.55acre land to be acquired at 60% solatium and to take active initiative so that the construction of kV Lakhisarai sub- station be started immediately. @Page No. 112. 13.02.2012 Letter from the Appellant to the District Magistrate to expedite the land acquisition procedure and to issue land possession letter to the Appellant immediately after starting payment of 80% compensation. @Page No. 113.

15.02.2012 Procedural checklist issued by District Land Acquisition Officer, Lakhisarai. @Page No. 114-115. 15.02.2012 Preparation of final estimate. @Page No. 114-119. 16.02.2012 Payment demand of Rs. 5,03,36,435 (Rupees Five crore three lakhs thirty six thousand four hundred thirty five only) raised by Collectorate General, Lakhisarai @Page No. 120. 23.02.2012 The Appellant submitted the demand draft for land acquisition to District Land Acquisition Officer. @Page No. 121-122. 31.03.2012 Certificate of possession of land issued @Page No. 122. August 2012 Actual possession of land Reference letter dtd.13.08.2012 @ Page No. 125.

24. The Commission, in the impugned order has refused to condone the time over run of three months and 23 days between 9th August, 2010 and 2nd December, 2010. We concur with the decision of this Commission on this aspect and do not find any infirmity in the same. It is manifest that after writing a letter dated 9th August, 2010 to the District Land Acquisition Collector with the request for

acquisition of the land for the project, the Appellant maintained stoic silence and did not follow up with the office of the land acquisition officer. The immediate next letter sent in this regard by the Appellant is dated 2nd December, 2010. Nothing has been brought to our notice by the Appellant explaining the efforts made by it during the intervening period to ensure that land acquisition process is initiated and completed at the earliest.

25. In this regard, we also note that concededly demand note for depositing 80% cost of land was received by the Appellant on 24th November, 2009 and the same was deposited by the Appellant on 8th March, 2010 i.e. after about 3 & ½ months which period also has remained to be explained on behalf of the Appellant. It has no where been stated in the memorandum of appeal or in the written submission as why there has been so much delay in depositing the 80% cost of the land. This aspect, even though, over-looked by the Commission, weighs against the Appellant and lends credence to the findings of the Commission on this count.

26. With regards to the period 2nd December, 2010 to 31st March, 2012 i.e. 15 months and 29 days which were consumed for completion of the land acquisition process, the Commission has

condoned the time over run of 12 months observing that the Appellant ought to have factored in the time schedule for land acquisition. However, at the same time, the Commission while acknowledging that there are various steps involved in the process of land acquisition like social impact assessment, expert group appraisal, preliminary notification under Section 4 of Land Acquisition Act, Declaration of Award and finally handing over the possession of land by the Collector, has observed that it is difficult to assess the time taken at various stages of such process. Therefore, it is not understandable as to how the Commission arrived at the conclusion that 3 months and 29 days (which period has been condoned) was enough for completion of such process. When we look at the list of dates outlining the land acquisition process, which is not disputed on behalf of the Respondents, we find that notification under Section 4 of the Land Acquisition Act was issued on 20th January, 2011 which was followed by notification under Section 6 of the Act the very next date i.e. 21st January, 2011. About one month thereafter i.e. on 23rd February, 2011, Appellant sent a letter to the district magistrate with the request to expedite the process by directing the concerned officers/employees to send the proposal under Section 7 and 17 (1)

of the Land Acquisition Act for consideration of the Government. On 2nd March, 2011, there was a meeting with LDO, Lakhisarai with respect to the acquisition of 38.05 acres of land. This was followed by letter dated 16th March, 2011 from the Appellant to the District Magistrate informing him that the proposal under Section 7 & 17(1) of the Land Acquisition Act has been submitted to the Government and request was made to initiate other necessary formalities so that after getting approval under Section 7 & 17(1) hearing under Section 9 may be commenced. The Government accorded approval under Section 7 & 17(1) on 19th May, 2011. Thereafter, the Appellant sent letter dated 9th July, 2011 to the land acquisition officer with the request to expedite the process under Section 9. Ultimately, award under Sections 9 & 11 of the Land Acquisition Act was made between 11th July, 2011 to 10th August, 2011. This was followed by the letters dated 24-26th September, 2011, 21st October, 2011, 31st October, 2011, 15th November, 2011, 21st December, 2011, 30th December, 2011, 23rd February, 2012 and 31st March, 2012 by the Appellant to the District Land Acquisition Officer /DM/SDM requesting them to complete the remaining procedure with respect to land acquisition expeditiously and to hand over the possession of the acquired land to the Appellant.

We find that all these events as well as the correspondences exchanged by the Appellant with various government authorities for expeditious completion of the land acquisition process have been totally over-looked by the Commission. By no stretch of imagination can it be said that the entire process could have been completed within three months and 29 days as conveyed by the Commission in the impugned order. It is evident that the Appellant was vigorously following with the Government authorities for expeditious completion for the land acquisition process and no part of delay in completion of the same can be attributed to the Appellant as it was absolutely beyond its control.

27. Hence, the total period of 15 months and 29 days from 2nd December, 2010 to 31st March, 2012 ought to have been condoned by the Commission.

28. Now coming to the time over run of 13 months and 25 days between August, 2012 and 26th September, 2013. Out of the same, the Commission has condoned the time over run of 4 months 28 days from 28th May, 2013 to 26th September, 2013 while refusing to condone the delay from August 2012 to 27th May, 2013 on the ground

that the Appellant had not submitted any documentary evidence for such delay.

29. Undisputedly, the period between August, 2012 and October, 2012 was monsoon period. The case of the Appellant is that there had been unprecedented flood like situation due to intense rain during these months resulting in water accumulation at the project site thereby hampering the execution of land filling as well as construction of boundary wall.

30. The Commission notes in the impugned order that the Appellant has submitted the images of rain affected area but at the same time has observed that the Appellant has not submitted any valid documentary evidence to substantiate that the rain and water accumulation was abnormal. However, the Commission has refrained from explaining what type of documentary evidence would have been valid on this aspect in support of the contentions of the Appellant. We note that in the petition itself, the Appellant had submitted the rain fall data for the corresponding period from the Indian Meteorological Department which showed that the rain fall during September to October, 2012 was 60% higher than the previous year 2011. This data supplied by IMD appears to have been

over-looked by the Commission. In view of the images of rain-affected area as well as the IMD data of the rain fall in the area during September, 2012 to October, 2012, we feel of the opinion that the period from August, 2012 to October, 2012 was condonable and the Commission has erred in condoning the same.

31. It is not clear from the impugned order as to on which ground the Commission refused to condone the time over run from October, 2012 to 27th May, 2013. It is not disputed that actual possession of the land was handed over to the Appellant in the month of August, 2012. It was the month when monsoon hit the area and, therefore, the work of the construction of the project was severely hampered due to excessive rain and water accumulation at the project site. The work could ultimately start in the month of October, 2012 only. It is not the case of the Respondent that there was any slackness on the part of the Appellant in the progress of work from October, 2012. Therefore, we feel that the said period also ought to have been condoned by the Commission.

32. Accordingly, we uphold the findings of the Commission in so far as the time over run for 3 months 23 days from 9th August, 2010 to 2nd December, 2010 has not been condoned as regards these four

assets 1, 2, 3 & 4. However, we find that the Commission has erred in condoning the time over run of only 3 months 29 days out of 15 months 29 days from 2nd December 2010 to 31st March, 2012 and is not condoning the time over run of about 10 months from August, 2012 to 28th May, 2013. We hold that the entire time over run from 2nd December, 2010 till 26th September, 2013 is condonable and ought to have been condoned by the Commission. The findings of this Commission in this regard are hereby set aside.

33. As regards the Assets 5, 6 7 & 8, there was a delay of 24 to 36 months in commissioning of these assets which is stated to be primarily on account of delay in processing of acquisition of private land.

34. It is argued on behalf of the Appellant that the Commission has not taken into account the material evidence on record in this regard and has erred in holding that the Appellant has not properly explained the reasons behind the delay in acquisition of land. It is submitted that the Commission has erred in not appreciating that :- (a) Request for acquisition of approximately 40 acres of land (≈22 acres government + ≈18 acres private) near Mauza Anchu on the Chaibasa–Saraikela road to the Deputy Commissioner, Chaibasa, was given on 31.08.2009

However, the land acquisition process could not proceed due to strong objections and stiff resistance from local villagers.

(b) Consequently, the concerned authority proposed alternate site near village Ulijharee and sought POWERGRID’s confirmation vide letter dated 12.08.2010 POWERGRID conveyed suitability vide letter dated 16.09.2010.

(c) Vide letter dated 07.10.2010 POWERGRID requested the Chairman, Jharkhand Vidyut Board to help in the allotment of said land (near Ulijharee) to it through pursuing the matter with State Government.

(d) On 15.02.2011 / 22.02.2011, a meeting with the Principal Secretary, Land Record Department, Jharkhand was held wherein the Department was directed to make available the said land to POWERGRID within a period of 2 months, and the said direction was conveyed to the Department.

(e) In the meantime, the matter was pursued by POWERGRID with the State Government for expeditious acquisition of land through discussion and written/verbal communication.

(f) Later, a meeting was held in the office of Principal Secretary (Revenue), Government of Jharkhand on 02.06.2011, wherein it was informed that the subject land

is already identified for a different entity i.e., Rungata Mines Limited, and therefore district authorities were requested to expedite the process of acquisition of the 2nd alternative land identified by POWERGRID.”

35. Learned Counsel for the Appellant vehemently argued that the Appellant had been actively pursuing the matter with the State authorities but land acquisition process could not be initiated due to reasons beyond the control of the Appellant. She would state that the Commission has failed to appreciate the fact that though the process of acquisition of government land and private land by the authorities was initiated simultaneously but despite regular follow up at difference levels of State Government, the possession of land was handed over to the Appellant only in April, 2013.

36. We note that with regards to the period between 7th July, 2010 to 19th May, 2011 (10 months 12 days) the Commission has condoned the time over run of 3 months 15 days from 7th July, 2010 to 22nd October, 2010. However, the Commission observed that the Appellant has not explained the period between 22nd October, 2010 to 19th May, 2011 (6 months 27 days) and hence refused to condone the same.

37. In this regard, we notice that a meeting with the Principal Secretary, Land Record Department, Jharkhand was held on 15th February, 2011 and 22nd February, 2011 wherein the department was directed to make available the land to the Appellant within a period of two months. It was in the subsequent meeting held on 2nd June, 2011 in the office of Principal Secretary (Revenue), Government of Jharkhand that Appellant was informed that the subject land is already identified for a different entity i.e. Rungata Mines Limited and, therefore, district authorities were requested to expedite the process of acquisition of the 2nd alternative land identified by the Appellant. Therefore, we are unable to concur with the findings of the Commission that the Appellant has failed to explain the period from 22nd October, 2010 to 19th May, 2011. It is evident that the said period was consumed by the Government authorities in identifying the land to be made available to the Appellant and once land was identified, it was found to have been already marked to different entity and, therefore, process of acquisition of alternative land was initiated. Patently, the delay in this regard cannot be attributed to the Appellant as it was beyond its control. In view of the same, time over-run of

entire period of 10 months 12 days, from 7th July, 2010 to 19th May, 2011 ought to have been condoned.

38. With respect to the period between 19th May, 2011 to 22nd April, 2013 (23 months 17 days), the Commission has condoned time over run of 3 months i.e. the period between 19th May, 2011 to 20th August, 2011 and has refused to condone the time over run of the period between 14th December, 2011 to 14th February, 2013 on the ground that the Appellant has not submitted any documentary evidence in this regard and has failed to explain the same. In this regard, we note that vide letter dated 31st January, 2012, office of Deputy Commissioner, West Singhbhum, Chaibasa informed the Appellant that the meeting is scheduled for 4th February, 2012 under the Chairmanship of Deputy Commissioner regarding the land acquisition. Thereafter, the Appellant vide letters dated 4th May, 2012 and 25th May, 2012 requested for approval to publish the notification under Section 4 of the Land Acquisition Act for acquisition of 38.86 acres of land. Vide letter dated 4th June, 2012, the office of Deputy Commissioner, West Singhbhum, Chaibasa sought approval for publication of a notification under Section 6 of the Land Acquisition Act from the Principal Secretary, Department of Revenue and Land

Reform, Jharkhand. Permission was granted to the Appellant for land acquisition on 8th June, 2012 subject to fulfillment of certain conditions. Accordingly, notification under section 6 of the land acquisition act was issued by the State Government on 16th June, 2012. It is contended on behalf of the Appellant that Jharkhand Voluntary Land Acquisition Rule, 2010 inter alia requires agreement with land acquisition office of Jharkhand and individual land owners for acquisition of private land and, therefore, the Appellant was gathering the land holding information for 38.86 acres of private land between 16th June, 2012 to 7th September, 2012 for the purpose of execution of agreements with various land owners. Thereafter, vide letter dated 7th September, 2012, District Land Acquisition Officer, Chaibasa sought clarification from the Appellant with respect to two agreements under Schedule II. All these documents had been submitted by the Appellant to the Commission along with the petition but these appear to have been over-looked by the Commission while passing the impugned order. In these facts and circumstances, it cannot be said that the Appellant has failed to explain the period between 14th December, 2011 to 14th February, 2013 as held by the Commission in the impugned order.

39. We may also note that another petition bearing No. 278/TT/2015 was filed by the Appellant before the Commission seeking determination of tariff with respect to the remaining assets at Chaibasa station. It was disposed off by the Commission vide order dated 28th September, 2017 thereby condoning the entire time over run from 31st August, 2009 till to 18th June, 2013 which was consumed during the process of land acquisition, while holding that the same was occasioned for the reasons beyond the control of the Appellant. The relevant portion of the said order is extracted herein below:- "……………………………………………………

27. The petitioner has submitted that the land acquisition process at Chaibasa sub-station was started on 31.08.2009 but the process of land acquisition, for the land initially identified by the petitioner near village Anchu could not be taken up by the Government Authority due to objections and stiff resistance of local villagers. It has submitted that an alternate land near village Ulijharee was suggested by the Authority and suitability of the land was sought from the petitioner vide letter dated 12.8.2010. The petitioner communicated the suitability of the land vide its letter dated 16.9.2010. However, the acquisition of this land was also delayed, since as per records of the revenue Authority, a proposal was earlier sent by them for acquisition of this land for M/s Rungata Mines Limited. As a result, 2nd alternate land was to be identified and the petitioner had to put up a fresh request for the acquisition of the land. The procedure for acquisition of private land under Jharkhand Voluntary Land Acquisition Rule 2010 required agreement with Land Acquisition of Jharkhand and individual land owners also. In-spite of regular follow- ups by the petitioner, the possession of the land could be

handed over to the petitioner after lease agreement is signed between the petitioner and Govt. of Jharkhand on 18.6.2013. Thus, the process of land acquisition took around 44-45 months. ………………………………………………………………."

31. We have considered the petitioner's submission with regard to Assets 3 and 5. As regards to the land acquisition problems, the petitioner has submitted chronological tabulation of events/correspondences along with documentary evidence to substantiate its claim. Having perused the available documents, we are of the view that the delay on account of land acquisition i.e. period from investment Approval (2.7.2010) to lease agreement with Government of Jharkhand (18.06.2013) is not attributable to the petitioner. This delay is to the tune of 1082 days.

………

33. . In view of the above deliberations, it is to conclude that the time overrun due to land acquisition problems, non-readiness of the downstream asset of JSEB and diversion of JUSNL transmission line were beyond the control of the petitioner. The petitioner has claimed delay to the tune of 782 days and 1188 days in commissioning of Assets 3 and 5 respectively. Thus, the entire time overrun is being condoned due to the reasons that cannot be attributed to the petitioner.”

(Emphasis supplied)

40. It is manifest that the project site in both the petitions was same, the land proposed to be acquired or later on acquired was same and the correspondences exchanged between the Appellant and the Government authorities were same but still the Commission in one

case i.e. petition No. 278 of 2015 condoned the entire time over run of 1082 days and refused to condone the portion of time over run in the instant case arising out of petition No. 85 of 2015. Such contradictory findings given by the Commission in absolutely similar facts and circumstances is not understandable. The Commission has failed to exhibit consistency in passing its orders which is expected of a judicial forum. For this reason also, we are unable to sustain the findings of the Commission in the impugned order with regards to the asset Nos. 5, 6, 7 & 8.

41. Hence, the entire time over run from 07.07.2010 till 18.06.2013 was condonable and ought to have been condoned with regard to Assets 5, 6, 7 & 8.

42. Learned Counsel for Respondent Nos. 2 & 3 i.e. Bihar Discoms had referred to Regulation 12(1)(a) of the CERC Tariff Regulations, 2014 to argue that the delay attributable to land acquisition is to be treated as “controllable factor” and, therefore, the claim of the Appellant for condonation of time over run on this ground is without any basis. It is submitted that once the time over run on account of land acquisition is held to be controllable factor, no IDC or IEDC can be allowed as per Regulation 11 of these Regulations.

43. Learned Counsel for the Appellant would argue that Regulation 12(1) of the CERC Tariff Regulations, 2014 has to be read along with Regulation 12(2) which defines uncontrollable factors as well as the Statement of Reasons (SoR) regarding Regulation 12 and upon doing so the position would become clear that the delay in land acquisition that arises out of uncontrollable factors can be considered on case to case basis by the Commission while conducting prudence check. Therefore, the Commission has adequate power to permit condonation of time over run in deserving cases on account of delay in completion of land acquisition process.

44. We find apposite to extract Regulation 11 & 12 of Tariff Regulations, 2014 hereunder :- “11. Interest during construction (IDC), Incidental Expenditure during Construction (IEDC)

(A) Interest during Construction (IDC):

(1) Interest during construction shall be computed corresponding to the loan from the date of infusion of debt fund, and after taking into account the prudent phasing of funds up to SCOD.

(2) In case of additional costs on account of IDC due to delay in achieving the SCOD, the generating company or the transmission licensee as the case may be, shall be required to furnish detailed justifications with supporting documents for such delay including prudent phasing of funds:

Provided that if the delay is not attributable to the generating company or the transmission licensee as the case may be, and is due to uncontrollable factors as specified in Regulation 12 of these regulations, IDC may be allowed after due prudence check:

Provided further that only IDC on actual loan may be allowed beyond the SCOD to the extent, the delay is found beyond the control of generating company or the transmission licensee, as the case may be, after due prudence and taking into account prudent phasing of funds.

(B) Incidental Expenditure during Construction (IEDC):

(1) Incidental expenditure during construction shall be computed from the zero date and after taking into account pre-operative expenses up to SCOD: Provided that any revenue earned during construction period up to SCOD on account of interest on deposits or advances, or any other receipts may be taken into account for reduction in incidental expenditure during construction.

(2) In case of additional costs on account of IEDC due to delay in achieving the SCOD, the generating company or the transmission licensee as the case may be, shall be required to furnish detailed justification with supporting documents for such delay including the details of incidental expenditure during the period of delay and liquidated damages recovered or recoverable corresponding to the delay:

Provided that if the delay is not attributable to the generating company or the transmission licensee, as the case may be, and is due to uncontrollable factors as specified in regulation 12, IEDC may be allowed after due prudence check: Provided further that where the delay is attributable to an agency or contractor or

supplier engaged by the generating company or the transmission licensee, the liquidated damages recovered from such agency or contractor or supplier shall be taken into account for computation of capital cost.

(3) In case the time over-run beyond SCOD is not admissible after due prudence, the increase of capital cost on account of cost variation corresponding to the period of time over run may be excluded from capitalization irrespective of price variation provisions in the contracts with supplier or contractor of the generating company or the transmission licensee.

12. Controllable and Uncontrollable factors:

The following shall be considered as controllable and uncontrollable factors leading to cost escalation impacting Contract Prices, IDC and IEDC of the project :

(1) The “controllable factors” shall include but shall not be limited to the following:

(a) Variations in capital expenditure on account of time and/or cost over-runs on account of land acquisition issues; (b) Efficiency in the implementation of the project not involving approved change in scope of such project, change in statutory levies or force majeure events; and

(c) Delay in execution of the project on account of contractor, supplier or agency of the generating company or transmission licensee.

(2) The “uncontrollable factors” shall include but shall not be limited to the following:

(i) Force Majeure events; and

(ii) Change in law.

Provided that no additional impact of time overrun or cost over-run shall be allowed on account of non- commissioning of the generating station or associated transmission system by SCOD, as the same should be recovered through Implementation Agreement between the generating company and the transmission licensee:

Provided further that if the generating station is not commissioned on the SCOD of the associated transmission system, the generating company shall bear the IDC [and IEDC] 6 or transmission charges if the transmission system is declared under commercial operation by the Commission in accordance with second proviso of Clause 3 of Regulation 4 of these regulations till the generating station is commissioned: Provided also that if the transmission system is not commissioned on SCOD of the generating station, the transmission licensee shall arrange the evacuation from the generating station at its own arrangement and cost till the associated transmission system is commissioned.”

45. The relevant portion of the Statement of Reasons (SoR) regarding Regulation 12 is also material and is reproduced hereinbelow :- “14. Controllable and Uncontrollable Factors {Regulation 12}

14.1 Clause 12 of the draft Regulations deals with the controllable and uncontrollable factors leading to cost escalation impacting IDC and IEDC. The first proviso provides that no additional impact of time overrun or cost overrun shall be allowed on account of non- commissioning of the generating station or associated transmission system by SCOD, as the same should be

recovered through Indemnification Agreement between the generating company and the transmission licensee. The second proviso provided that if the generating station is not commissioned on the SCOD of the associated transmission system, the generating company shall bear the IDC or transmission charges if the transmission system is declared under commercial operation. The third proviso specified that if the transmission system is not commissioned on SCOD of the generating station, the transmission licensee shall arrange the evacuation from the generating station at its own arrangement and cost till the associated transmission system is commissioned.

Commission’s Views

14.5 The Commission is of the view that for the purpose of IDC computation, it may not be appropriate to consider the delay in land acquisition and associated activities as uncontrollable factor as the IDC is to be computed from the date of infusion of debt funds and typically the land is acquired before the financial closure or before the infusion of debt funds. In fact, the acquisition of land is also one of the pre-disbursement conditions by Lenders for disbursement of debt funds.

14.6 As regards the treatment of delay in execution of project on account of contractor, supplier or agency of the generating company or transmission licensee as uncontrollable factor, the Commission is of the view that all such events cannot be categorised as uncontrollable factors, and it is the responsibility of the Project Developer to ensure adequate provisions with respect to delay in contracts with contractor, supplier or any other agency. On the Force Majeure events, the Regulations already cover natural calamities and hence, there is no need to specifically mention some of the natural calamities such as earthquake, etc.

14.7 As regards delay on account of land acquisition, arising out of Uncontrollable Factors as specified in Regulation 12 of these Regulations, the generating company or the transmission licensee may approach the Commission on case to case basis with proper documentary proof.

14.8 On the issue of capping the IDC and IEDC, the Commission is of the view that the Regulations detail the controllable and uncontrollable factors, which shall be considered leading to cost escalation impacting IDC and IEDC subject to prudence check and hence, the capping is not required in the Regulations. Further, some of the issues raised by the stakeholders are related to detailed prudence check, which will be examined by the Commission while carrying out the prudence check.”

(Emphasis supplied)

46. It is thus clear from the perusal of Statement of Reasons regarding Regulation 12 that delay on account of land acquisition arising out of uncontrollable factors i.e. Force Majeure events and Change in Law as specified in Regulation 12 can be condoned by the Commission on case to case basis with proper documentary proof. It cannot be said that Regulation 12(1)(a) lays down an absolute and blanket rule to be applied mechanically that the time over run of the project on account of land acquisition issues cannot be condoned. Such an interpretation would be legally flawed and would be contrary to Regulation 12(2) as well as the Statement of Reasons for

Regulation 12. Needless to say that the Commission is required to examine the claims with regards to the time over run on account of delay in completion of land acquisition process on case to case basis and decide the same on the basis of documentary proof submitted by the claimant in this regard.

47. Therefore, we do not find any force in the argument on behalf of the Bihar Discoms that the Commission has no power to condone the time over run which has occasioned on account of delay in land acquisition process.

Conclusion :-

48. In the light of the above discussion and findings, we hereby condone the time over run in commissioning of the assets under consideration as under :- Assets Time over-run in commissioning asset Time over-run not condoned Time over-run condoned Asset-1

months days 3 months 23 days 13 months Asset-2 18 months 23 days 3 months 23 days 15 months Asset-3 21 months 26 days 3 months 23 days 18 months 3 days Asset-4 22 months 21 days 3 months 23 days 18 months 28 days Asset-5 24 months 26 days Nil Entire period Asset-6

24 months 26 days Nil Entire period

Asset-7

36 months 19 days Nil Entire period Asset-8

24 months 26 days Nil Entire period

49. The case is now remanded back to the Commission for computation of IDC and IEDC allowable to the Appellant afresh in terms of this judgement upon obtaining requisite document from the parties and upon according reasonable opportunity of hearing to the parties in this regard. The Commission shall complete such exercise within three months from the date of the receipt of the judgement.

50. The appeal stands allowed in these terms.

Pronounced in the open court on this 6th day of July, 2026.

(Virender Bhat)

(Seema Gupta)

Judicial Member

Officiating Chairperson

✓ REPORTABLE / NON REPORTABLE

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