M/s Bhoruka Power Corporation Limited vs Haryana Electricity Regulatory Commission & Ors on 30 October 2026

JUDGEMENT

PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON

1. The present Appeal has been preferred by M/s Bhoruka Power Corporation Limited challenging the Order dated 18.12.2015 passed by the Haryana Electricity Regulatory Commission (“HERC” or “Commission”) in Case No. HERC/PRO-59 of 2014, whereby the Appellant’s petition seeking re- determination of tariff in respect of its 6 MW Small Hydel Power Project at Dadupur, Yamuna Nagar, Haryana (“Project”) due to non-availability of Full Supply Level (FSL in short) of 916 ft, came to be rejected.

Description of Parties:-

2. The Appellant - M/s Bhoruka Power Corporation Limited (“BPCL”) is a Generating company in terms of Section 2(28) of the Electricity Act and has set up a 4x1.5 MW Small Hydro Power Plant in Yamuna Nagar District of Haryana in the year 2010 ("Project").

3. The Respondent No. 1- The Haryana Electricity Regulatory Commission is the State Regulatory Commission for the state of Haryana and exercising powers vested under Section 86 of the Electricity Act, 2003.

4. The Respondent No. 2-Haryana Power Purchase Centre ("HPPC) is a joint forum of Uttar Haryana Bijli Vitran Nigam Limited (“UHBVNL”) and Dakshin Haryana Bijli Vitran Nigam Limited (“DHBVNL”) for procurement of power on behalf of the these State Distribution Licensees.

5. The Respondent No. 3, is the Irrigation Department, Government of Haryana, the department of State Government responsible for the administration and management of irrigation works in the State of Haryana.

6. The Respondent No. 4, Haryana Renewable Energy Development Agency ("HAREDA") is an agency of the Government of Haryana functioning as the nodal agency for implementation of various renewable energy schemes and projects in the State. The Respondent No. 5, Sh. Sahab Singh, is private Respondent residing at Village Harewa, Tehsil Chhachhroli who had moved an application before the Haryana Commission for being impleaded as a necessary party to defend his interest and those of affected farmers of nearby villages. The

Haryana Commission impleaded him as a necessary party by order dated 07.01.2015. Facts of the case

7. On 07.06.1999, a tripartite Memorandum of Understanding (“MoU”) was executed between HAREDA, the Irrigation Department, Government of Haryana, and the Appellant ( BPCL) for development of a 4 MW Small Hydro Project at Dadupur, Western Yamuna Canal (Lower). Subsequent to MoU, in 2002, BPCL prepared and submitted the Detailed Project Report ( “DPR”) for setting up of 6 MW of small hydro project at the site and it was approved by HAREDA on 18.04.2003.

8. On 27.12.2006, the HPGCL submitted the PPA, for approval of State Commission. The State Commission, vide its Order dated 10.07.2007, approved the PPA and approved the Tariff for the project based on Project cost of Rs 3259.52 lakhs as per DPR of 2006. The tariff was determined at Rs.2.80 per unit for the first 12 years and Rs.1.70 per unit for years 13 to 15, from the date of commissioning. On 03.03.2008 Appellant and UHBVN signed the PPA.

9. The Project was commissioned on 19.03.2010. It is the case of Appellant that after commissioning of the Project, FSL of 916 ft. could not be maintained on account of seepage and waterlogging affecting adjoining agricultural land and crops. Consequently, the pond level was maintained at a lower level. The issue was considered by the Irrigation Department and other concerned authorities and various measures were examined for addressing the seepage problem.

10. Prior to commissioning, on 17.03.2010, the Appellant had approached the Commission seeking re-determination of tariff on account of increase in the Project cost and additional works undertaken for the Project. The Commission, vide Order dated 08.09.2010, revised the project tariff to Rs.3.18 per unit for the first 12 years and Rs.1.93 per unit for the 13th to 15th years. The said Order was challenged before this Tribunal in Appeal No.78 of 2011, however this Tribunal vide its order dated 27.04.2012 disposed of the Appeal No. 78 of 2011 and inter alia, held that the original tariff had not been determined under Section 63 of the Electricity Act, 2003 and that the Commission was empowered under Section 62 of the Act and the applicable Regulations to re-determine the tariff.

11. The Appellant represented to the Irrigation Department and HAREDA that the Project had been designed on the basis of an FSL of 916 ft. and that operation at a lower FSL was resulting in substantial reduction in generation. However same could not be resolved.

12. Appellant then filed Case No. HERC/PRO-59 of 2014 before the Commission seeking re-determination of tariff applicable to the Project on the basis of the realistic FSL available at Dadupur Pond and consequential revision of tariff from the date of commissioning. The State Commission, vide the Impugned Order dated 18.12.2015, dismissed the said petition. Aggrieved by the aforesaid Order, the Appellant has preferred the present Appeal. SUBMISSIONS URGED ON BEHALF OF APPELLANT

13. The issue in the present case arises from the Irrigation Department’s inability to maintain the pondage at the FSL of 916 ft., which, as per Clause 8 of the MoU, was the Government’s undertaking to enable sustainable power

generation and was not an independent obligation of BPCL. Tariff determinations were premised on the availability of the said FSL, as the DPR’s estimated annual generation of 31.5 MU formed the basis of the tariff approved in 2007, while the additional capital cost approved in 2010 was intended to enable BPCL to “maintain a PLF/CUF of 56%”. Further, HAREDA and the Respondent No.3 repeatedly affirmed FSL of 916 ft. as the agreed project parameter in their subsequent correspondence, including BPCL’s letter dated 15.12.2010 and the joint inspection culminating in the Irrigation Department’s letter dated 16.03.2011. However, at the review meeting dated 24.07.2013, the Engineer-in-Chief, Irrigation Department, while acknowledging that “the Dadupur Pond has been designed for FSL of 916 ft.”, stated that “FSL at 916 ft. cannot be allowed”, whereupon the Appellant requested that this position be communicated in writing to enable it to approach HERC. It was this refusal, and not any default on the part of the Appellant, that led to the filing of Petition on 17.11.2014 before the commission and, thereafter, the present Appeal.

14. It is further submitted that the shortfall in generation is not attributable to any obligation or deficiency on the part of BPCL, but is a direct consequence of the Government’s refusal to honour its undertaking under Clause 8 of the MoU. The Appellant’s own reciprocal obligation under Clause 21 was confined to making alternate arrangements for uninterrupted water flow and strengthening the banks in the vicinity of the Project, an obligation it exceeded by constructing, at its own cost, a new gated regulator and renovating the Additional Head Regulator gates, expressly to enable it “to maintain the required F.S.L. pond level of 916.0 ft.”. Further, WAPCOS’s report, commissioned by the Irrigation Department, traced seepage predominantly to causes “essentially unrelated to the Canal”, while acknowledging that canal seepage falls within the State’s domain; thus, no deficiency on the Appellant’s part is established on record.

Further, the only risk undertaken by the Appellant under Clause 19 of the MoU was that of seasonal variations in hydrological data and discharge patterns, i.e., variations in the quantum of water flowing through the canal from season to season, which cannot be construed as an assumption of risk arising from a reduction in FSL or storage level, a structural parameter of the pond within the Irrigation Department’s control and conceptually distinct from seasonal discharge variations. It is submitted that ‘Head’, as identified in the Notice, is the difference between the Head Race Level and the Tail Race Level, and power generation varies directly with Head and Discharge; consequently, when the Irrigation Department fails to maintain pondage at the FSL, the Head Race Level falls, resulting in a corresponding reduction in Head and generation below the designed capacity. This direct physical relationship is illustrated by the fact that HPGCL, operating on the same canal with a greater Head, achieves correspondingly higher generation capacity. Since the tariff was determined on the presumption that pondage would be maintained up to the FSL of 916 ft., its non-maintenance necessitates redetermination of the tariff on the basis of the realistic storage level actually available, namely, 912–913 ft.

15. HERC’s order dated 10.07.2007 expressly stipulated that the tariff would “continue to be in force till such time it is reviewed and approved by the Commission”, thereby envisaging its review and redetermination. The revisable nature of the tariff under Section 62, the requirement to determine the final tariff on the basis of the actual cost of the completed project, and HERC’s power to review the tariff during the tariff period were affirmed by this Tribunal in UHBVNL v. HERC, Appeal No. 78 of 2011, decided on 27.04.2012. A conjoint reading of the PPA and the two tariff orders establishes that the tariff was fixed for a period of 15 years and must be considered in light of the project parameters on which it was determined.

16. It is further submitted that the finding in the Impugned Order that the Project was “ill-conceived” is contrary to the material on record. The project parameters, including the site, Head, Discharge and FSL, were determined and repeatedly reaffirmed by the Government’s own instrumentalities, beginning with the Haryana State Electricity Board’s scheme in the mid-1970s and the Central Electricity Authority’s clearance dated 16.11.1981, followed by the Chief Engineer’s approval of the FSL of 916 ft. on 20.11.2006. Significantly, the Impugned Order itself records that, as early as 2003, the Technical Evaluation Committee had noted that the existing head regulator gate could attain only 914.8 ft., as against the “maximum designed pond level” of 916 ft., and had recommended remodelling “for attaining a head of 916 ft.…”, thus, the deficiency in the Government’s infrastructure was known to the authorities before approval of the DPR and execution of the PPA and cannot be attributed to the Appellant.

17. This Tribunal, in Greenyana Solar (P) Ltd. v. HERC, Appeal No. 302 of 2024, decided on 23.04.2025 (paras 15–16), held that project-specific tariff redetermination under Section 62 is tailored to the economic and operational realities of the project and reflects the actual costs incurred, subject to prudence check. Further, in Patikari Power Ltd. v. HPERC, APTEL Appeal No. 179 of 2010, decided on 23.04.2012 (paras 36 and 45(ii)), this Tribunal redetermined the tariff where the hydrology provided by the State’s own entities fell short of the envisaged parameters, holding that such circumstances amounted to a change in the basic parameters, dependent on natural conditions and beyond the appellant’s control. The present case stands on an equal, if not stronger, footing, as the FSL of 916 ft. was represented and envisaged by the Government’s own instrumentalities, but was subsequently not maintained by them, resulting in a change in the basic project parameters beyond the Appellant’s control.

Accordingly, the Appeal deserves to be allowed and the tariff redetermined on the basis of the realistic FSL and storage level actually available at Dadupur Pond, in accordance with Regulation 29 of the HERC RE Tariff Regulations, 2010, and the principles laid down in Greenyana Solar and Patikari Power. SUBMISSIONS URGED ON BEHALF OF RESPONDENT NO.2 (HPPC)

18. It is submitted that the dispute concerning the maintenance of the FSL is essentially inter se the Appellant and Respondent No. 3 (Irrigation Department), as any assurance regarding the FSL arises, if at all, from the MoU dated 07.06.1999, to which Respondent No.2 is not a party. The PPA dated 03.03.2008 neither stipulates any FSL requirement nor imposes any obligation upon Respondent No.2 in respect of the pond level. Further, the Force Majeure clause (Clause 6.1) does not cover inadequate FSL, and no notice under Clause 6.1(b) was issued by the Appellant. Moreover, Clause 2(ii) of the PPA expressly absolves Respondent No.2 of any expenditure incidental to the remodeling of existing structures. Accordingly, the consequences of a dispute between the Appellant and Respondent No. 3 cannot be imposed upon HPPC or passed on to the consumers of Haryana by way of tariff redetermination.

19. It is submitted that, under Clauses 3, 5, 8, 19 and 21 of the MoU, the Appellant was responsible for conducting further investigations, assessing hydrological data and project feasibility, and strengthening the canal banks and related structures at its own cost. The DPR also mandated thorough site investigation. Despite the Project capacity being increased from 4 MW to 6 MW, the Appellant failed to adequately assess the feasibility of maintaining the FSL at 916 ft. The Impugned Order records that the DPR underwent revisions in 2006– 07 without examining the FSL and site suitability for the 6 MW Project, that the

Appellant proceeded on the assumption of an FSL of 916 ft. without adequate financial prudence or risk assessment, that the causes subsequently identified by WAPCOS ought to have been ascertained at the inception stage, and that the Appellant’s failure to strengthen the banks aggravated seepage. Respondent No. 3 and HAREDA consistently raised these objections, whereas the Appellant offered only a general denial. The correspondence further demonstrates that the Appellant was aware of the issue, proposed remedial measures of its own, and that Respondent No. 3 relied upon its assessment; however, the measures proved inadequate, and the WAPCOS-recommended measures were not undertaken due to “apprehensions”. Significantly, all such correspondence was exchanged with Respondent No. 3 and HAREDA, and Respondent No.2 was never informed of the issue. The Appellant did not dispute the WAPCOS findings, except with regard to the cost and time involved. Moreover, the remedies recommended by WAPCOS, namely canal lining costing Rs 33.51 crore and an X-regulator costing Rs 5.25 crore, pertain to canal works falling within the domain of the Appellant and Respondent No. 3, and not the purchaser. The Impugned Order considers all relevant clauses, correspondence and the conduct of the parties, is well reasoned, and calls for no interference.

20. It is submitted that the issue of FSL was never raised by the Appellant in its first petition dated 17.03.2010, and the order dated 08.09.2010, which also recorded the Appellant’s failure to survey and reassess the additional work required, was never challenged by it. Despite the availability of full-year generation data for FY 2010–11 (12.93 MUs), the Appellant raised no such issue before any forum, except through correspondence with Respondent No. 3 and HAREDA , and even accepted an interim FSL of 912.8–913.4 ft. The Appellant had already benefited from tariff redetermination on the basis of the completed project cost, whereby the tariff was enhanced from Rs 2.80 to Rs 3.18 per unit, a

determination upheld by this Tribunal as being based on actual cost, while HERC allowed approximately Rs 4 crore out of the claimed Rs 8.25 crore for reasons duly recorded. The subsequent filing of Petition No. 59 of 2014 on 17.11.2014 is therefore an afterthought. Having accepted and acted upon the order dated 08.09.2010, which attained finality and was upheld in Appeal No. 78 of 2011, the Appellant is estopped from reopening the issue, which is also barred by the principle of res judicata, as recognised in GUVNL v. GERC, Appeal No. 279 of 2013, decided on 22.08.2014

21. It is contended that the present case is squarely covered by Puri Oil Mills Ltd. v. HPPC, Appeal No. 90 of 2013, decided on 09.04.2014 (J-1), wherein this Tribunal, in similar circumstances involving a canal-based project, held that strengthening the canal banks was the developer’s responsibility, that adequate time was available for due diligence, and that there was no valid ground to reopen the PPA or award compensation for loss of generation. Further, the Hon’ble Supreme Court, in HPPC v. Sasan Power Ltd., 2023 SC 42, decided on 06.04.2023 held that a bidder who fails to verify the relevant position “acted at his own peril” and that a Commission “cannot rewrite a contract solemnly entered into” or exercise regulatory powers contrary to its express terms. The sanctity of the PPA and the impermissibility of altering the agreed tariff to the prejudice of consumers have likewise been affirmed in GUVNL v. Solar Semiconductor Power Co., CA No. 6399 of 2016, decided on 25.10.2017; GUVNL v. EMCO Ltd., (2016) 11 SCC 182; and TRANSCO v. Sai Renewable Power, (2011) 11 SCC 34, para 86. The Appellant’s reliance on GUVNL v. Tarini Infrastructure, (2016) 8 SCC 743, is distinguishable, as that case involved a factual mistake regarding the evacuation point, which increased the distance from 4 km to 23 km and resulted in an unforeseen expenditure of Rs 10 crore. No comparable

supervening event exists in the present case, and a defect inherent at the inception of the Project cannot be treated as a Force Majeure event.

22. It is submitted that even assuming that the Appellant could not have foreseen the alleged difficulties despite due diligence, any liability arising from the assurance regarding the FSL would lie with Respondent No. 3 (Irrigation Department) and would be governed by the terms of the MoU. The failure to maintain the designed FSL cannot, therefore, constitute a ground for redetermination of tariff at the expense of HPPC and the consumers. The Appellant’s remedy, if any, lies against Respondent No. 3 under the MoU, and Respondent No.2 cannot be held liable for either the Appellant’s alleged lack of prudence or any default on the part of Respondent No. 3. Without prejudice, it is further submitted that, since the Appellant approached HERC only on 17.11.2014, no relief, if otherwise admissible, can be granted for any period prior thereto.

23. It is further submitted that IA No. 1932 of 2026, seeking to place seven documents on record under Rule 30, along with an open-ended liberty to file further documents, deserves dismissal. All documents pre-date the Impugned Order and the Appeal, yet the Appellant has failed to explain why they could not be produced earlier despite due diligence. The IA has been filed after conclusion of hearings, following the query raised by this Tribunal on 14.08.2026 regarding the basis of FSL 916 ft., without affording HPPC an opportunity to address the submissions orally. The Appellant has already supplemented the record through IA No. 641 of 2017. Further, IA/A-2, IA/A-3 and IA/A-5 are already on record as while IA/A-6 is cumulative. The open-ended prayer for filing further documents is also impermissible. Without prejudice, the documents do not advance the Appellant’s case, as HPPC is neither a party to them nor is FSL stipulated in the PPA. Rather, IA/A-1 (Technical Evaluation Committee report dated 14.02.2003) identified the mismatch between FSL 916 ft. and the head regulator level of

914.28 ft., leakage, deficiencies in the Appellant’s assumptions and the need for remodeling at its cost, thereby highlighting risks known at the inception. IA/A-4 dated 09.03.2010 places responsibility for damage and leakage upon the Appellant while maintaining the maximum pond level. IA/A-6, being HAREDA’s letter dated 27.11.2013, merely requests Respondent No. 3 to confirm the FSL in writing, records no decision or tariff commitment, and indicates that the Appellant itself acknowledged by 2013 that FSL of 916 ft. could not be maintained due to seepage. IA/A-7 dated 30.12.2014 records that responsibility for seepage lies with the Appellant under Clause 8 and attributes the same to its failure to strengthen the banks, thereby corroborating HERC’s findings. The material question is not merely whether 916 ft. was the designed FSL, but whether this gives rise to any liability on the part of HPPC or warrants tariff redetermination against it, which the documents do not establish. Accordingly, IA No. 1932 of 2026 deserves dismissal; alternatively, if any document is taken on record, reasons may be recorded, the Appellant be required to prove its authenticity and contents, and the document be considered in its entirety, including the portions adverse to the Appellant. ANALYSIS AND DISCUSSION

24. We have heard Mr. Alok Shankar, learned counsel appearing on behalf of the Appellant, Mr. Aditya Singh, learned counsel for the Respondent No.2, and perused written submissions, Impugned Order and other material on record. The issue arising for consideration in the present Appeal is essentially with regard to the Appellant’s claim for re-determination of tariff on account of non-availability of FSL of 916 ft., on the basis of which the Project had been designed, and the consequential impact of the reduced FSL upon generation and financial viability of the Project. To effectively adjudicate the issue, it is of relevance to consider the

entire sequence of events with regard to conceptualization of project and tariff determination for the project.

25. A Memorandum of Understanding MOU dated 07.06.1999 was signed between the Appellant and Haryana Renewable Energy Development Agency (HAREDA) for implementation of hydel project at Dadupur Western Yamuna Canal. The said MOU was executed in pursuance of Govt. of Haryana notification dated 08.01.1998, whereby private investors were invited for setting up of mini/micro hydel projects on Build Operate and Own ( BOO) basis in Yamuna Nagar with an envisaged capacity of about 4MW capacity. Under the terms of the MOU, HAREDA was to discontinue all activities relating to investigation and preparatory works of the project upon execution of the MOU. The responsibility for carrying out further investigation and preparation of the Detailed Project Report (DPR) was cast upon the Appellant. The relevant clauses of the MOU, which delineate the respective obligations of the parties, are extracted herein below for ready reference: “1.The Company is desirous of implementing, and have submitted its proposal to HAREDA for investigation and implementation of, the proposed 4000 KW Small Hydel Project at Dadupur Western Yamuna Canal (Lower), Yamuna Nagar District of Haryana, hereinafter, referred to as the Project. ……..

3. Save as otherwise provided hereinafter, HAREDA will stop all activities, if any being done on investigations and other works of the project with the signing of this MoU and the responsibility for carrying out further works/investigations, thereafter, shall be that of the Company. ……..

5. HAREDA agree to provide the Company, copies of all available documents, data, information reports relating to the project including

copies of all investigations and studies, if any, carried out since mooting the concept of the project. ……..

8. The Government shall allow pondage to be created in the upstream to the Full Supply Level (FSL) or allowable free board level for sustainable power generation purposes. adequately strengthened by the Company to the satisfaction of the Government. In such cases canal banks in the upstream shall be adequately strengthened by the Company to the satisfaction of the Government. ……..

15. The Company shall submit a Detailed Project Report to HAREDA within 4 months from the date of signing of MoU or within extension in time given by HAREDA. If extension in time is denied by HAREDA or the Company is unable to submit a DPR within the said time limit the MoU will be rescinded and processing fee deposited by the Company with HAREDA forfeited. ………

19. The Company shall have no right to claim any compensation from HAREDA or any other developer for exploitation of potential upstream or downstream of the site allotted to him, Company shall satisfy themselves with hydrological datas and pattern of discharge which vary according to irrigational requirements in canals and distributories. Considering these parameters, Company may structure the power plants at their own risk. HAREDA or the Government shall in no way be …..

21. Company shall make alternate arrangements for uninterrupted flow of water in canal systems and also provide controlling mechanism, strengthening the structure including the banks in upstream at their own cost and to the entire satisfaction of the Government.

22. The Company agree that they shall carry out the investigations as well as the implementation of the project keeping in view all stipulated quality control measures as well as safety standards and the physical as well as financial parameters (with particular reference to the quantities of various items of the approved Detailed Project Report). The Company shall allow access to the authorised representative(s) of HAREDA to all the locations of the project to ensure compliance in this respect.”

26. It is evident from the terms of MOU dated 07.06.1999, that the Appellant can create pondage upstream of FSL for sustainable power generation, however it would be the responsibility of the Appellant to strengthen the canal banks upstream. Clause 19 of the MOU, further stipulates that Appellant was required to satisfy itself with the hydrological data and pattern of discharge and only upon such consideration these parameters, it may structure the plant at its own risk.

27. In pursuance of the MoU, the Appellant prepared a Detailed Project Report (DPR) for setting up of 6 MW Project ( 4x1.5 MW) in departure from the originally envisaged 4 MW capacity plant under the MOU and Govt. of Haryana notification dated 08.01.1998 . The DPR records that the requisite studies and surveys, as mandated under the Central Electricity Authority (CEA) checklist, were either undertaken afresh or based upon earlier survey drawings. The DPR enumerates various surveys and investigations, including topographical surveys, hydrological surveys, and sub-surface investigations, which were relied upon for finalizing the project parameters. The DPR also note that with respect to Dadupur Pond, the Full supply level could not be achieved earlier due to heavy leakage. However, it records that a new Barrage had since been completed with 22 bays of 25 ft each, thereby addressing the earlier deficiencies.

28. After taking note of earlier attempts made for power generation, which could not fructify for one reason to another, it is mentioned in the DPR that Appellant has undertaken fresh studies with detailed investigation to formulate a fresh proposal for harnessing the Western Yamuna Canal Main Line lower discharge for Power Generation and the Appellant has been able to formulate most economically viable proposal for power development at this place. In the DPR, after considering actual flow data available for 10 years from 1992-2001, Energy

available from 1992 to 2001, the 31.5 MUs of energy was estimated considering 90 % dependable year. Accordingly, Appellant has decided to set up 6 MW of plant and proposed that about 31.5 MUs, including auxiliary consumption of energy could be generated from 6 MW installation at full plant availability. After considering downtime of 4 % on account of planned plant maintenance and 3.5 % on account of Grid failures, the net export energy was arrived at 28.54 MU and it also mentions that PLF of 59.95% appears well with the 3 Nos of Upstream power houses located in the same canal. With these parameters, the project cost was indicated as Rs 4991.78 lacs and cost of generation as Rs 2.08 per unit in first year.

29. It is thus manifest from the DPR that Appellant has carried out requisite studies and finalized the project design, parameters and size of the project including the design energy or PLF of 59.95 %.

30. HAREDA vide its letter dated 18.04.2003 approved the DPR subject to certain conditions and it specifically mentioned that initially the potential of the site was estimated as 4 MW ( performance security charges deposited accordingly), which was later revised to 6 MW based on detailed Hydrological studies, besides depositing balance performance security charges, any remodeling of the existing structure of Irrigation department incidental to the installation of the project shall be at their cost.

31. Subsequently, State Commission vide its order dated 10.07.2007, approved the Power Purchase Agreement (PPA) forwarded by HPGCL, subject to certain modifications and determined the tariff payable for the project as Rs 2.80 / unit for 1-12 years and Rs 1.70 / unit for 13-15 years. Incorporating the modifications so approved, PPA was signed between the Appellant and UHBVNL

on 03.03.2008. Article 2 obligates the UHBVNL to purchase energy generated from the project save and except in circumstances of system constraints or force majeure. Further, under Article 7 of the PPA, in case of nonpayment of charges for continuous period of two months by UHBVNL, Appellant is also entitled to sell energy to third parties.

32. It is thus evident from the PPA, that under normal circumstances, UHBVNL was obligated to purchase the energy from the Appellant’s project, and tariff payable for such energy up to a period of fifteen years was expressly agreed therein. Article 3 of the PPA further stipulates that after expiry of initial 15 years terms, the tariff shall be subject to review by State Commission and in case UHBVNL declines to purchase power beyond the said period, the Appellant shall be permitted to sell the energy to third parties. Accordingly, under the contractual framework of the PPA, the Respondent-Discom was bound to pay for the energy received from the Appellant’s project at the tariff so agreed and approved by the State Commission.

33. Perusal of the documents also reveal that the Appellant, after realizing the non-achieving of FSL of 916 Ft, vide its letter dated 06.08.2008 addressed to Hathnikund Barrage Circle (HBC) Irrigation department sought their approval for renovation of Additional Head Regulatory Gates, at their own cost, which are leaking profusely and stated that renovation will help them maintain FSL level of 916 ft of Dadupur Pondage. Approval for same was granted by HBC, Irrigation department vide letter dated 21.08.2008. It is understood from the record that the said work was completed and thereafter vide its letter dated June 05, 2009 Appellant handed over the control of Additional Head Regulator gates to Water Service Division, Dadupur for their operational control.

34. The Appellant thereafter filed a petition in the year 2010 before the State Commission, seeking increase in the project cost on various accounts including expenditure incurred on repair of barrage gate works and repair of existing gates undertaken to maintain FSL of 916 feet and prayed for re-determination of tariff. It is an admitted position that hydro project was commissioned in March 2010, prior to passing of the order in which tariff was re-determined. It is relevant to note that Appellant’s plant was already in operation at this time and the Appellant was necessarily aware about the actual energy being generated from the project. The Appellant, however, confined its submissions to the necessity of the additional works for maintaining the FSL of 916 Ft, and did not seek revision of design energy on account of non-maintenance of FSL at the said level.

35. The State Commission in its order dated 08.09.2010, deliberated in detail the various additional expenditure claims of Appellant and specifically allowed expenditure on barrage gate and repair of existing gates, holding that such works were necessary to enable petitioner (i.e. Appellant herein) to maintain PLF/CUF of 56 %, though the UHBVN has disputed the additional claims of Appellant post signing of PPA. Nevertheless, by the aforesaid order dated 08.09.2010, the State Commission re-determined the tariff at Rs. 3.18 per unit for the first twelve years (as against Rs. 2.80 per unit approved earlier) and Rs. 1.93 per unit for the thirteenth to fifteenth years (as against Rs. 1.70 per unit approved earlier).

36. Though respondents have assailed the aforesaid revision in tariff before this Tribunal, however order dated 08.09.2010 was upheld by this Tribunal in the judgement dated 27.04.2012.“UHBVNL v. Haryana Electricity Regulatory Commission”, in Appeal No. 78 of 2011. The Tribunal held that the final tariff has to be determined based on the actual cost of the completed project and the Regulations framed under the enabling provisions of the Act will override the PPA.

Consequently, the Respondent- Discom are obligated to pay the enhanced tariff of Rs. 3.18 per unit for the first twelve years and Rs. 1.93 per unit for the thirteenth to fifteenth years, in terms of the State Commission’s order dated 08.09.2010, as upheld by this Tribunal.

37. It is evident from the above, that Appellant, while engaging with Irrigation department undertook to carry out the additional works at its own cost, though subsequently claimed the expenditure in tariff, which claims were also allowed. The record further discloses that the Appellant continued to correspond with the Irrigation department, requesting them to maintain FSL of 916 Ft. It was represented that on the advice of local irrigation department, pond level was being maintained below the FSL due to seepage concerns raised by farmers, which in turn impaired the Appellant’s ability to generate the requisite energy. The matter was considered in a review meeting held on 24.07.2013, wherein the Irrigation Department records that maintenance of FSL at 916 ft. could result in submergence of adjoining agricultural areas and consequent damage to crops. Subsequently, the Irrigation Department recorded that, in the absence of an appropriate remedial measure to control seepage, maintenance of pond level beyond 913 ft. was not desirable.

38. In order to examine the seepage problem and to identify appropriate remedial measures, a study was undertaken by WAPCOS. The said study suggested various measures for addressing the seepage and related issues, which was discussed in a meeting on 29.10.2015, wherein Appellant represented that measures suggested by WAPCOS were not only time consuming but involves high cost as well as shutting down of the canal for prolonged period thereby affecting operations. The matter continued consideration before the concerned authorities, and on 10.11.2015, a committee constituted to assess the

affected area reported that approximately 6 acres of land was submerged with seepage water and approximately 80 acres was partially affected.

39. Thereafter in 2014, Appellant filed a petition before State Commission for re-determination of Tariff in view of non-maintenance of FSL of 916 Ft, in which Impugned Order dated 18.12.2015 has been passed. After considering in detail the submissions made by Irrigation Department, HAREDA, Respondent Discom, MOU, PPA between the parties, State Commission in conclusion observed as under and dismissed the petition. “The Commission has also taken note of the submissions by the Petitioner their rejoinder to the reply filed by Irrigation Department) that the seepage problem existed even prior to the construction of the project as is evident from the fact that the 'Seepage drain' was constructed along WYC (MLU) and Hydel Channel even prior to the constructions of BRCL's project. A siphon was also provided to drain out the water. Now we refer again to clause 1 of the MOU wherein it has been provided that the Government shall allow pondage to be created in the upstream to the FSL or allowable free board level for sustainable power generation purpose and in such cases canal banks in the upstream shall be adequately strengthen by the company. The Commission observes that had BPCL exercised due diligence, it could have foreseen that with the creation of pondage and rise in level at Dadupur Pond, the water level in the upstream side of WYC(MLU), Hydel channel and Som river would further aggravate the seepage problem and may lead to water logging of the adjoining areas. All the measures which have been suggested by WAPCOS would have been evaluated by BPCL viz-a-viz the financial viability of the project right at the time of inception of project and preparation of DPR. Further had BPCL prudently estimated/envisaged the expenses to be incurred on strengthening of the embankments and on other measures so as to ensure that there would be no water logging of the adjoining areas or at least the problem of seepage would not be aggravated, they might have structured the project in a different manner, may be a project of lesser capacity with lower capital cost. Thus, this Commission has every reason to believe that it was an ill-conceived project and no proper due-diligence was exercised by M/s BPCL as also recorded in the Commission's Order dated 08.09.2010 which has attained finality as the same was also upheld by the Hon'ble APTEL and no statutory

appeal, as per information of this Commission, have been filed by any party in the Hon'ble Supreme Court. In view of the above discussions the Commission holds that the present Petition for re-determination of tariff is misconceived and is accordingly rejected.”

40. In hydroelectric projects, the Full Supply Level (FSL) denotes the maximum water level in the reservoir under normal operating conditions, corresponding to 100% of its designed storage capacity. It represents the highest elevation to which water is stored for routine purposes such as power generation, irrigation, and municipal supply, but excludes flood situations. While the correlation between Head, Discharge, and generation is undeniable, the responsibility to revalidate the declared FSL and design the project accordingly rests squarely with the developer. In our considered view, it is incumbent upon the project developer, as proponent of the hydroelectric scheme, to undertake comprehensive and independent studies to cross-verify the Full Supply Level (FSL) indicated and to determine parameters like design head, design discharge, and consequently the installed capacity and tariff viability of the station. It is noteworthy that the project was initially conceived as a 4 MW installation. However, upon completion of detailed studies and investigations, the Appellant itself proposed enhancement of the capacity to 6 MW, with a projected design energy of 31.5 MUs and a Plant Load Factor of 59.95%.

41. Prudence requires that the developer validate the declared FSL through hydrological yield analysis, topographical and geological surveys, sedimentation and silt yield studies, and environmental and social impact assessments, so that the reservoir level is not overstated beyond what is realistically attainable. The ratio of UHBVNL judgement does apply in the present issue, as the Appellant is

seeking revision of project parameters thus redetermination of tariff once again, while for maintaining the FSL of 916 Ft, additional cost has already been allowed.

42. It has been rightly observed in the Impugned Order that Appellant failed to undertake due diligence and blindly accepted the data given, relevant paragraphs of the Impugned Order are extracted hereunder:- “3. The DPR seems to have undergone two iterations in the year 2006 and 2007 after the first DPR reportedly prepared in the year 2002. However, the issue of FSL including site suitability and achievable pond level for a 6 MW project was never dealt with despite existence of Clause 19 of the MOU wherein it was provided that HAREDA / Government shall not be responsible for any increase and decrease in generation as a result of variation in the Canal Flow. Hence, the Petitioner it seems blindly accepted and proceeded to construct the project on an assumption that FSL of 916 ft. will be available to it. Such an assumption defies all cannons of financial prudence and project risk management especially in a hydro project which even otherwise is susceptible to geological surprises at the project implementation stage and subsequently. Thus, the reasons now highlighted by WAPCOS in its final Report submitted to the Irrigation Department, Haryana on "Remedial Measured for Controlling Seepage Caused due to Raising of Pond Level at Dadupur-Haryana" should have been known to the Petitioner at the time of inception of Project itself, had due-diligence was exercised. Hence, they ought to have taken remedial measures as per the relevant Clause of the MOU dated 7th June, 1999.”

43. The reliance has been placed by Appellant on “Greenyana Solar (P) Ltd. v. HERC”, Appeal No. 302 of 2024 decided on 23.04.2025; to contend that project specific tariff determination under section 62 of the electricity is to arrive at a tariff that is uniquely tailored to the economic and operation realities of a particular project. In the said judgment, the issue pertained to deciding the allowable AC: DC ratio in a solar project for arriving at a particular Capacity Utilisation Factor (CUF) and permitting the associated cost. The factual matrix of that case is clearly distinguishable and does not apply to the present matter. In the instant case, the project parameters were required to be finalized by the Appellant after exercising

due diligence. The Appellant itself proposed the design energy and estimated the cost in the Detailed Project Report, which was subsequently enhanced on the Appellant’s own proposal. Had the Appellant undertaken proper due diligence and accurately estimated the project parameters including the cost, and financial viability, such issues could have been conclusively determined at the DPR stage itself, prior to signing of the PPA. Instead, the Appellant is seeking piecemeal increase in cost for no fault of Respondent- Discom.

44. Appellant has placed reliance upon the decision in “Patikari Power Ltd. v. HPERC” Appeal No. 179 of 2010 decided on 23.04.2012, wherein tribunal observed that the tariff of a hydroelectric project depends significantly on its capital cost and water inflows and where the actual river discharge was substantially lower than the discharge anticipated at the planning and tendering stage would tantamount to change in the circumstance which are beyond the control. The Tribunal further noted that, since the developer therein had relied upon hydrological data furnished by the Respondent, the shortfall amounted to a change in the basic parameters underlying the project. Accordingly, it was held that the State Commission can review the already concluded PPA between the developer and generator and Appellant was granted liberty to approach the State Commission with supporting material and data for consideration after hearing the concerned parties. The factual matrix of the present case, however, is materially different. The DPR prepared by the Appellant was not based upon data submitted by the Respondent-Discom. On the contrary, under the terms of the MOU executed with the Irrigation Department, the responsibility for carrying out the requisite investigations and preparing the DPR rested squarely upon the Appellant.

45. The Appellant thereafter executed the PPA with the Respondent-Discom subsequent to the finalization of project parameters and cost in the DPR. Furthermore, our attention has not drawn to any clause in the PPA, which stipulates that tariff so noted in the PPA is conditional upon availability of FSL of 916 ft and Respondent-Discom would be liable to pay enhanced tariff, if any, on account of non availability of FSL of 916 Ft. In such circumstances, any deficiency in achieving the proposed design energy cannot be attributed to the Respondent- Discom, nor can the Respondent-Discom be saddled with the burden of higher tariff on account of the Appellant’s failure to achieve the projected parameters.

46. This Tribunal in its judgement dated 22.08.2014 in “GUVNL v. GERC” Appeal No. 279 of 2013 dealt with a plea for redetermination of the tariff based on the capital cost and equity and other parameters. This Tribunal categorically observed that a party that has accepted a tariff order, executed PPAs on its basis, and acted upon the agreed tariff cannot subsequently seek its re-determination on a different basis, where the requirements of promissory estoppel and legitimate expectation are satisfied. The Tribunal further held that the project developers had invested in establishing their projects relying on the existing tariff framework and that the tariff order had attained finality. It further held that the settled tariff could not be reopened through subsequent proceedings, as the principles of res judicata applied. Accordingly, the Tribunal upheld the State Commission’s findings on promissory estoppel, legitimate expectation and res judicata.

47. Ratio of the aforesaid judgement squarely applies to the present case. Here, the tariff was in fact re-determined by the State Commission, subsequent to execution of PPA, vide its order dated 08.09.2010, which has affirmed by this Tribunal in its judgement dated 27.04.2012, with no appeal preferred against the

said judgement and parties have acted upon it. Consequently, the issue of tariff has attained finality between the parties. It is reiterated that Appellant, while seeking redetermination of tariff earlier, never sought revision of design energy on account of non-achieving of FSL of 916 Ft.

48. The findings of this Tribunal’s judgement in “Puri Oil Mills Ltd. v. HPPC” in Appeal No. 90 of 2013, decided on 09.04.2014 is applicable in the present case. In this matter, the Tribunal rejected the Appellant’s claim for additional capital cost, enhanced O&M charges and compensation for loss of generation arising from damage to the canal, its poor condition and the Irrigation Department’s requirements for canal maintenance. The Tribunal observed that strengthening the canal banks and maintaining the canal upstream and downstream of the project were the Appellant’s responsibilities, and that it had sufficient opportunity to assess the canal’s condition before entering into the PPA. Accordingly, the Tribunal found no valid ground to reopen the PPA or re-determine the tariff of the Appellant hydro projects. The ratio of the aforesaid judgment squarely applies to the present case, as in the present case Appellant seeks to shift responsibility for low generation on account of non-maintenance of FSL and seepage control onto the Respondent-Discom, despite the fact that such obligations were contractually not vested in the Respondent - Discom.

49. We are in agreement with the contentions advanced by Respondent – Discom that a developer who fails to verify the relevant project conditions despite being cautioned to do so acts at its own peril. In the present case, tariff as re- determined vide State Commission order dated 08.09.2010 and reaffirmed by this Tribunal in its Judgement dated 27.04.2012, constitutes the finally agreed tariff between the parties. Appellant cannot seek re-determination of tariff once again. Hon’ble supreme Court in catena of Judgements (“HPPC v. Sasan Power Ltd.,

(2024) 1 SCC 247; “GUVNL v. Solar Semiconductor Power Co.”, 2016 (16) SCC 498,; GUVNL v. EMCO Ltd. and TRANSCO v. Sai Renewable Power, (2016) 11 SCC 182, has emphasized the sanctity of the PPA and held that the agreed tariff cannot be altered merely by invoking regulatory or inherent powers. The ratio of the aforesaid judgments squarely applies to the present case, where the tariff has already been re-determined and affirmed, and the parties have acted upon it. The sanctity of the PPA, coupled with the doctrines of finality and estoppel, precludes any further reopening of the tariff issue.

50. Before concluding, it is necessary to deliberate upon the issue of filing of additional documents by Appellants through I.A. 1932 of 2026 dated 28.08.2026. The hearing in the matter was concluded on 14.08.2026 and parties were granted two weeks’ time to file their respective written submissions. However, subsequent thereto, Appellant filed the aforesaid I.A. seeking permission to place on record following additional documents, purportedly to answer a query by the bench about the basis of FSL of 916 ft during the hearing of the matter. “ a) Annexure A-1: Proposal Evaluation Report dated 14.02.2003 prepared by the Technical Evaluation Committee, Government of Haryana, evaluating the proposal of BPCL for installation of the 6 MW (4x1.5 MW) Small Hydro Project at Dadupur.

b) Annexure A-2: Letter dated 20.11.2006 issued by the Chief Engineer/YWS, Irrigation Department, Haryana, approving setting up of the Small Hydro Project at Dadupur.

c) Annexure A-3: Addendum dated 09.03.2007 to the Tripartite MoU dated 07.06.1999 executed between HAREDA, the Haryana Irrigation Department, and BPCL, extending the validity of the said MoU.

d) Annexure A-4: Letter dated 09.03.2010 issued by the Executive Engineer, Water Services Division, Dadupur, sanctioning closure of the additional Head Regulator gates commissioning of the 6 MW Hydro Project.

e) Annexure A-5: Letter dated 15.12.2010 issued by BPCL to the Executive Engineer, Water Services Division, Dadupur, regarding cleaning the seepage drain.

f) Annexure A-6: Letter dated 27.11.2013 issued by the Director General, Renewable Energy Department, Haryana & HAREDA, to the Engineer-in- Chief, Irrigation & Water Resources Department, Haryana, regarding maintaining of pond level at Dadupur.

g) Annexure A-7: Letter dated 01.01.2015 issued by BPCL, and letter dated 30.12.2014 issued by the Executive Engineer, Water Services Division, Dadupur, regarding seepage of water in villages Harewa, Jaidhar and Jaidhary due to increase of pond level, the latter reproducing Clause 8 of the MoU.”

51. Placing of additional documents at such a belated stage, after conclusion of the hearing, has been strongly objected by the Respondent-Discom. It is pointed out that all documents are dated 14.02.2003 to 01.01.2015, i.e. prior to the date of passing of the Impugned Order and filing of the present Appeal, and no explanation has been furnished why these documents were not placed earlier.

52. We are also of the view that since the principal issue in the Petition before the State Commission, as well as in the present Appeal pertained to revision of tariff on account of non-availability of FSL, being beyond the control of Appellant, and Appellant wished to rely upon these documents to buttress its case, permission ought to have been sought to place these documents on record before this Tribunal during the hearing itself. This would have afforded the Respondent an opportunity to rebut any claim based on such documents and to contest the reasons for their non-production before the Commission.

53. A general query from the bench does not entitle the Appellant to place on record documents, after the matter has been reserved for judgement, particularly when such documents pertain to a period prior to passing of impugned order. The

Appellant, without seeking time to address the query, allowed the matter to be reserved thereby signifying that its arguments stood concluded. The subsequent attempt to file additional documents as a matter of second thought cannot be permitted.

54. Nevertheless, in the interest of justice, we have examined the documents as well as the objections by the Respondents as noted above. On merit, it is observed that none of the documents guarantees or assures a FSL of 916 ft to the Appellant. As already observed above, the issue of leakage was known to the Appellant at the DPR stage itself. In fact, the letter dated 30.12.2014 (A-7) from Irrigation department to Appellant, citing the clauses of MOU, assigns the responsibility of seepage water upstream on the Appellant. Though same was refuted by the Appellant vide its letter dated 01.01.2015, however such correspondence does not advance its case against the Respondent-Discom as they have been assured a tariff based on design parameters of the project so finalised by the Appellant. As such, the issue of non-achievement of FSL of 916 ft. is not an inter se matter between the Appellant and the Respondent-Discom. The Respondent-Discom, and consequently the consumers, cannot be saddled with the burden of enhanced tariff on this account.

55. It is reiterated that, had the Appellant exercised proper due diligence and accurately estimated the project parameters including cost, design energy, and financial viability, such matters could and ought to have been conclusively determined at the DPR stage itself, prior to execution of the PPA. Instead, the Appellant has sought piecemeal enhancement in tariff, firstly on account increases in cost, and now reduction in design energy thereby attempting to shift the burden of its own lapses onto the Respondent-Discom and ultimately the consumers. Proper investigation and validation of project parameters is the sine

qua non for establishing the financial viability of a hydroelectric project, and failure to do so cannot be visited upon the counterparties.

56. In light of the foregoing deliberations, precedents, and settled principles, we find no infirmity in the impugned order. The captioned appeal, along with all pending interlocutory applications, stands disposed of in the above terms. PRONOUNCED IN THE OPEN COURT ON THIS 30th DAY OF OCTOBER, 2026. (Virender Bhat) Judicial Member (Seema Gupta) Officiating Chairperson REPORTABLE / NON-REPORTABLE Pr/ag/ak