W.A.Nos.383 v. Cancel all the wind, hybrid and experimental PPAs which are

petitioners, therefore, challenged the impugned letters on the following grounds: W.A.No.383 of 2019 & batch - 8 - HCJ & NJS, J GROUNDS OF CHALLENGE IN THE WRIT PETITIONS

1. The impugned order and the impugned letters are in violation of the principles enshrined under Articles 14(1) and 19(1)(g) as also Articles 301 and 302 of the of the Constitution of India;

2. The tariff decided and adopted through a bidding process under Section 63 (for solar power) cannot be altered/interfered with;

3. The tariff determined by APERC (under Section 62 of the 2003 Act) cannot be amended by the State Government;

4. Constituting a HLNC for negotiation of tariff is not permissible in law;

5. The impugned order and impugned letters are violative of the Doctrine of Promissory Estoppel and Legitimate Expectation;

6. The scope of the impugned order and the action of the Government of Andhra Pradesh and the DISCOM is outside the four corners of the 2003 Act and regulatory framework and that the role of the Government is limited under the 2003 Act;

7. The impugned order will have grave and adverse consequences and inconsequent impact on DISCOM in continuous performance of its obligations from solar PPAs;

8. The impugned order violates the provisions of Contract Act, 1872 and the basic principles of contract law and is in violation of the vested rights of the petitioners. RESPONDENTS’ STAND IN COUNTER

9. The respondents defended the impugned orders/letters/actions, inter alia, contending that: W.A.No.383 of 2019 & batch - 9 - HCJ & NJS, J i. the writ petitions are not maintainable because the issues relating to tariff are to be determined by the Regulatory Commission; ii. The State Government is competent in exercise of power given to it under Article 162 of the Constitution of India; iii. By constituting the Committee, the State has participated in the activity of power generation to protect its interest as well as that of the consumers; iv. The DISCOMS are in financial crisis; therefore, the DISCOM has issued the impugned letter dated 12.07.2019 only after negotiation to bring down the tariff by mutual consent of both parties, which is permissible under law and also permissible as per the terms of the PPAs; v. The Government of Andhra Pradesh is not a stranger to the affairs of Electric Supply Companies and their PPAs, as it has powers under Sections 11, 65 and 108 to give directions to APERC; however, Government is not set to determine or to modify the tariff unilaterally; vi. Subject PPAs have been entered for purchase of power at an unreasonably high prices, which needs to be reduced in the interest of consumers; vii. The bidding process undertaken by the respondents at the relevant time did not discover the real market price, which has reflected drastic reduction of tariff realized by various states from 2015 onwards; viii. The bidding process by the DISCOMS in 2014 was not conducted as per Section 63 of the 2003 Act, because revised guidelines were issued by the Government of India in the year 2017; therefore, in the absence of guidelines, the bidding W.A.No.383 of 2019 & batch - 10 - HCJ & NJS, J process was not as is required under Section 63 of the 2003 Act; ix. Revision of tariff is permissible in law because assessment of tariff is a continuous process and the same can be revised in public interest as Distribution Company is required to discharge its function on commercial principles in terms of Section 61 of the 2003 Act. x. The impugned letter dated 12.07.2019 does not violate sanctity of PPAs and neither the Government is using its dominant position to interfere in the affairs of DISCOMS. Any modification of terms of PPAs would come into force only after approval by the APERC. The DISCOMS do not propose to unilaterally cancel the PPAs and only propose to seek further remedies under the 2003 Act in regard to the tariff, continuation of the PPAs etc. in supplementation of the already filed O.P.No.17 of 2019 before the APERC revision/reduction of tariff.

10. The Union of India appearing through the learned Assistant Solicitor General, supported the case of the petitioners, inter alia, contending that cancellation of the contracts (PPAs) is not at all warranted, because once contracts are concluded, the State cannot unilaterally ask for its amendment in the absence of allegation of fraud etc. being established. DECISIONS/FINDINGS BY LEARNED SINGLE JUDGE

11. While determining the issues, the learned single Judge observed that investments in this case are also made by foreign pension funds as is clear from the Union Minister’s letter dated 09.07.2019 and further that W.A.No.383 of 2019 & batch - 11 - HCJ & NJS, J institutional investors like LIC of India, Unit Trust of India and others have also invested in these solar/wind projects. It is also held that terms of the contract do not permit unilateral alteration or at the behest of a third party. Referring to the argument of the learned Advocate General, learned single Judge would hold that the provisions relied upon by the State deriving source of power under Sections 11, 65 and 108 of the 2003 Act to issue directions to the DISCOMs, are not applicable. Similarly, it is also held that once there is a law governing the field, particularly, a Central law, the State Government in exercise of its Executive power under Article 162 of the Constitution of India, cannot pass any order which would trench upon or occupy and intrude the area occupied by the APERC. Ex consequenti, the learned single Judge allowed the writ petitions quashing both the instructions, i.e. G.O.Ms.No.63 dated 01.07.2019 issued by the Government of Andhra Pradesh and the letter dated 12.07.2019 issued by the A.P.S.P.D.C.L. and all related and consequential actions taken pursuant thereto. However, the learned single Judge proceeded further to deal with the issue on the caption “payments due and the financial quagmire” and eventually directed the DISCOMs to honour the bills raised by the petitioners and to pay the same at the “interim rate” of Rs.2.44p for solar power and Rs.2.43p for wind power, with a further observation that all the pending and future bills of all the petitioners should be paid at this interim rate till the dispute is resolved by the APERC in O.P.No.17 of 2019 and O.P.No.67 of 2019. It is appropriate to mention here that maintainability of O.P.No.17 of 2019 and O.P.No.67 of 2019 has been challenged in other batch of writ petitions, which too have been disallowed by the learned W.A.No.383 of 2019 & batch - 12 - HCJ & NJS, J single Judge and the said order is under challenge in writ appeals, which have been heard analogously as Group-B matters.

12. In the impugned order, the learned single Judge has also dealt with the issue regarding curtailment order passed by the A.P. State Load Despatch Center (APSLDC). The curtailment order was called in question by way of interim application in some of the writ petitions, whereas the same have also been made part of main relief in some other writ petitions. Be that as it may, the learned single Judge has allowed the prayer of the petitioners holding that the terms of the contract have to be honoured and the State cannot issue directions to the DISCOMs or to the generators on the ground that tariff in the PPAs is high. Curtailment of power for any reason whatsoever has been disapproved holding that the generators are entitled to a notice before any action is taken except in a very grave and sudden emergency. The respondents were then directed not to take any coercive steps of any nature including curtailing production, stopping evacuation (for power) or the like except after giving due notice to the generators and as per the PPAs; the Regulation and the 2003 Act. This part of order dealing with curtailment issue is subject matter of challenge in Group-C matters, which are writ appeals filed by APSLDC. SUBMISSIONS OF APPELLANTS IN GROUP-A MATTERS The learned senior counsel and other counsels vehemently argued that: W.A.No.383 of 2019 & batch - 13 - HCJ & NJS, J i. The interim rate/interim arrangement fixed by the learned single Judge goes against the principles of policy certainty, regulatory certainty and sanctity of concluded contracts. ii. The projects which are established under Section 62 of the 2003 Act wherein a valid tariff has been made applicable for a period of 25 years cannot be subjected to interim tariff during currency of the PPAs, as the same amounts to alteration of the terms of contract binding between the parties. iii. The tariff envisaged under the PPAs is a vested right of the parties and the same cannot be taken away by any of the party or by interim arrangement of the Court. iv. The interim arrangement ordered by the learned single Judge has in effect granted final relief to the DISCOM/Govt. of A.P., by erroneously interlinking the present proceedings with O.P.No.17 of 2019 and/or O.P.No.67 of 2019. v. Buttressing the submission, is contended tariff determined by the APERC under Section 62 of the 2003 Act having never been questioned/assailed by DISCOM, the same has attained finality. Therefore, the learned single Judge could not have directed payment at the interim rate. vi. Writ court exercising power under Article 226 of the Constitution of India, cannot grant relief of an interim nature adverse to the interest of the petitioners after allowing the writ petition. By doing so, the learned single Judge has committed an error of jurisdiction. vii. The learned single Judge has erroneously fixed the interim rate though there is no such prayer of the DISCOM before the APERC in O.P.No.17 of 2019. W.A.No.383 of 2019 & batch - 14 - HCJ & NJS, J viii. The plea of financial difficulty taken by the DISCOM is a misnomer and such plea has been turned down by the Hon’ble Supreme Court in Energy Watch Dog v. CERC & ors.1 and order dated 08.11.2021 in Civil Appeal No.1843 of 2021 in the case of Maharashtra State Electricity Distribution Company Limited vs. MERC and ors. The rate fixed by the learned single Judge would cause ix. irreparable loss to the appellants. x. Tariff once adopted by the APERC in due exercise of statutory scheme under Section 63 of the 2003 Act, after bidding process for a period of 25 years, cannot be interfered with or altered. xi. On behalf of solar power generators, it is argued that O.P.No.17 of 2019 and related proceedings have no correlation with the solar power generators and subsequent petition, i.e. O.P.No.67 of 2019 was filed before the APERC pursuant to the impugned order; therefore, on the date of the impugned order, no O.P. was pending in respect of solar power generators. xii. There being no prayer/submission by either of the parties for fixing any interim rate/interim tariff, learned single Judge ought not to have entered into the said arena. xiii. Learned single Judge did not appreciate the fact that the writ petitions challenging the proceedings of O.P.No.17 of 2019 is a different issue than the one arising in Group-A matters, which were preferred challenging G.O.Rt.No.63 dated 01.07.2019; thus, learned single Judge has wrongly joined the two issues for applying the interim tariff. xiv. It is put forth that DISCOM had earlier preferred the appeal against the order passed by the learned single Judge quashing G.O.Rt.No.63 dated 01.07.2019 and letter dated 12.07.2019. 1 (2017) 14 SCC 80 W.A.No.383 of 2019 & batch - 15 - HCJ & NJS, J However, the DISCOM having withdrawn the appeals at a later point of time, the order passed by the learned single Judge quashing G.O.Rt.No.63 dated 01.07.2019 has attained finality. Therefore, there was absolutely no occasion or justification to direct payment of bills under the interim tariff. xv. On behalf of solar power generators, it is argued that APERC being an expert body is an appropriate Commission exercising its statutory function under Section 63 of the 2003 Act, which has a tariff adoption process based on competitive bidding mechanism; therefore, the same cannot be altered or repealed at a later point of time. xvi. Government having already recovered energy charges from consumers, there is no equity in favour of the DISCOM. SUBMISSIONS OF RESPONDENTS IN GROUP-A MATTERS i. Interim tariff/interim rate fixed by the learned single Judge is only an interim arrangement. ii. Writ Court can mould the relief on the basis of obtaining facts and circumstances of the case. iii. Writ Court is entitled to balance equities by keeping in view interest of both the parties. iv. Learned Advocate General referred to the law laid down by the Hon’ble Supreme Court in Ramesh Chandra Sankla and ors. v. Vikram Cement and others 2 and Ghaziabad Development Authority v. Delhi Auto & General Finance Pvt. Ltd. and ors. 3