M. P. POWER MANAGEMENT COMPANY LIMITED, JABALPUR v. M/S. SKY POWER SOUTHEAST SOLAR INDIA PRIVATE LIMITED & OTHERS

p. 100 Copy page pinpoint

A behind the default notice under Article 9.1 was lost sight of by the appellant. We have unravelled also, the impact of the use of the word ‘may’ in Article 9.1. The action of the appellant in departing from unambiguous regime of the PPA without any justification would make its actions arbitrary.

127Copy pinpoint127. The other aspect projected by the appellant is what was projected in the Review Petition filed before the High Court. It was contended essentially as follows: The first respondent had committed a fraud on the Office of the Chief Electrical Inspector, the appellant and on the Court. C It was alleged that the project was divided into 10 blocks of 5MW each and each Block of 5MW would have 116/117 Inverters approximately. Each of the Inverter was to have a unique distinctive serial number. Each inverter was to have 43KV rating, as indicated in the CEIG Report. The fraud consisted of a discovery by the appellant on an alleged ‘detailed’ analysis of the serial numbers of the inverters, that in each Block, there were several Inverters having numbers which were common/duplicate and interchangeably used in the same or other blocks. It was alleged that for about 186 Invertors serial numbers were commonly, duplicably and interchangeably used. Some of the inverter numbers were not legible. Therefore, it was alleged that there was lack of due diligence by the authorised personnel of the CEIG.

128Copy pinpoint128. In this regard, the first respondent has countered the case of the appellant not only by producing invoices supplied by the overseas supplier and the bill of entry issued by the Customs Department but the Lorry Receipts, to establish the procurement of 1175 Inverters required for the first respondent Unit in 2017. It is also their case that the inverter serial numbers themselves carry no significance. They were mere identifiers for the purpose of record keeping, warranty claims, etc. All the 1163 Inverters installed by the first respondent had identical mechanical specification and the mere mention of incorrect serial numbers in the Report of the CEIG did not establish that the first respondent was not ready to commission the project. The first respondent also has pointed out that on learning of the duplication of the few inverters serial numbers in the Report of the CEIG, it promptly approached the CEIG on 16.09.2020 H with details of the correct unique serial numbers and the corresponding

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 101 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

location of the inverters. It requested the CEIG to inspect and verify the inverters and to issue a corrigendum to the first Report dated 09.08.2017. In fact, there is reference to first respondent in compliance with the first impugned Judgment writing to the CEIG earlier on 15.04.2020, to visit the project site for reissuing/revalidating the approval for commissioning the project, since the validity of the first report dated 09.08.2017 had lapsed. It is specifically contended in the reply to the Review Petition that due to non-cooperation of the appellant on the excuse of Covid-19, the CEIG inspection could not be undertaken. This stand is reiterated, in fact, in the counter affidavit in this Court also. It would appear that the first respondent had deposited the inspection fee of Rs.66,14,000/- which is said to be equipment based meaning thereby that it was paid reckoning all the inverters. It would appear that no inspection has been carried by the CEIG based on the request for revisit. As far as this aspect is concerned, apart from the fact that the CEIG has conducted an inspection and given a Report on 09.08.2017, certifying the readiness of the Unit of the first respondent, the first respondent has produced documents like invoices from overseas sellers, bill of entry with the Customs Department and certain lorry receipts. The alleged fraud is the common number found in 186 inverters in the Report of the CEIG. A physical inspection by the CEIG, which was necessitated in terms of the original Judgement, at any rate, for revalidation of the Report was and is necessary and inevitable even if the appeals fail. The first respondent had alerted the E CEIG for the need for a reinspection for ascertaining the aspect relating to duplication in numbers. It would appear that such inspection has not been carried out. In this regard, it is important to notice that the appellant carried out an inspection on 19.04.2018 and it had not found out any such discrepancy as it has not projected in regard to the aspect of common numbers or illegibility of numbers, in the inverters, in its Report dated 21.04.2018. At any rate, the PPA clearly provided for the issuance of a default notice, providing an opportunity to remove the defect. This obligation has been observed in its breach.

129Copy pinpoint129. Therefore, we would find that an inspection by the CEIG would necessarily have to be carried out in which the appellant would have to be involved to facilitate the exercise. In the facts of this case, on being satisfied, the CEIG would necessarily have to grant the re-validation of the earlier Report. It would also involve an opportunity to the CEIG to look into the aspects which have been projected by the fist respondent itself in its letter dated 16.09.2020. The report would indeed indicate the H

p. 102 Copy page pinpoint

A state of affairs about all the facets. As already noticed, even under the impugned Judgement dated 27.02.2020, the first respondent would have to submit necessary applications. We only clarify that it may involve removing any remaining deficiencies with the fifth respondent.

130Copy pinpoint130. It may not be wholly irrelevant to notice the following aspect B which is reflected in the counter affidavit filed by the respondent No.1 before this Court. “It is of utmost importance to mention here that while the challenge to the 2018 Termination Notice was pending, the Petitioner had proposed a so-called amicable resolution of the dispute with the C Respondent No.1 and convened a meeting for this purpose on February 6, 2020. Occurrence of this meeting and the discussions held are recorded at paragraphs 7 and 8 of the Impugned Order

1. During this meeting, the Petitioner had attempted to impress upon the Respondent No.1 to explore ‘Third Party Sale’ from the project or, agree to a reduction in tariff in line with the recent auctions conducted by SECI for other solar power projects. Respondent No.1 had rejected both the option of ‘third Party Sale’ or, the attempts to reduce tariff specified in Article 9.7 of the PPA, which was discovered through a transparent competitive bidding process. The very fact that the Petitioner had proposed to the respondent No.1 to explore sale of power from the Project to third parties is proof enough that the Project was complete and ready for commissioning.” In this regard, we may notice paragraph 4 of the minutes of the meeting dated 06.02.2020 which reads as follows: - F “4. MPPMCL further stated that, as the commissioning of the project has been substantially delayed and, in the meantime solar binding tariffs have been considerable reduced up to Rs. 2.61/ Unit for which MPPMCL has already entered into PPAs, therefore MPPMCL offered M/s Sky Power to supply power at reduced G tariff of the project was the lowest in the bid and their investment was made during the FY 2016-2017 therefore, supplying power to MPPMCL at reduced tariff will not be viable hence not possible.” We would think that essentially the appellant’s attempt was to secure a reduction in the rate. The rate of the first respondent was H

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 103 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

found to be the lowest after a clearly keenly competitive international A bidding, involving a large number of bidders.

131Copy pinpoint131. In the totality of facts, we would, therefore, think that though for reasons, which may not be the same as in the impugned judgment, we need not interfere with the view taken by the High Court. The appeals fail and are dismissed. Parties to bear their own costs. B

Bibhuti Bhushan Bose Appeals dismissed. (Assisted by : Neha Sharma, LCRA)