Before embarking on the exercise of interpretation of
the agreement it is necessary to take stock of the wellsettled
canons of construction of contracts. Lord Hoffmann in
Investors Compensation Scheme Limited vs. West
Bromwich Building Society1 summarized the broad
principles of interpretation of contract as follows:
(1) Interpretation is the ascertainment of the meaning which
the document would convey to a reasonable person having
all the background knowledge which would reasonably have
been available to the parties in the situation in which they
were at the time of the contract.
(2) The background was famously referred to by Lord
Wilberforce as the "matrix of fact," but this phrase is, if
anything, an understated description of what the
background may include. Subject to the requirement that it
should have been reasonably available to the parties and to
the exception to be mentioned next, it includes absolutely
anything which would have affected the way in which the
language of the document would have been understood by a
reasonable man.
(3) The law excludes from the admissible background the
previous negotiations of the parties and their declarations of
subjective intent. They are admissible only in an action for
rectification. The law makes this distinction for reasons of
practical policy and, in this respect only, legal interpretation
differs from the way we would interpret utterances in
ordinary life. The boundaries of this exception are in some
respects unclear. But this is not the occasion on which to
explore them.
(4) The meaning which a document (or any other utterance)
would convey to a reasonable man is not the same thing as
the meaning of its words. The meaning of words is a matter
of dictionaries and grammars; the meaning of the document
is what the parties using those words against the relevant
background would reasonably have been understood to
mean. The background may not merely enable the
reasonable man to choose between the possible meanings of
words which are ambiguous but even (as occasionally
happens in ordinary life) to conclude that the parties must,
for whatever reason, have used the wrong words or syntax.
(See : Mannai Investments Co Ltd v Eagle Star Life Assurance
Co Ltd [1997] 2 WLR 945.
(5) The "rule" that words should be given their "natural and
ordinary meaning" reflects the common sense proposition
1 1998 (1) AIR 98
that we do not easily accept that people have made linguistic
mistakes, particularly in formal documents. On the other
hand, if one would nevertheless conclude from the
background that something must have gone wrong with the
language, the law does not require judges to attribute to the
parties an intention which they plainly could not have
had. Lord Diplock made this point more vigorously when he
said in The Antaios Compania Neviera SA v Salen Rederierna
AB [1985] 1 AC 191, 201:
"... if detailed semantic and syntactical analysis of words in a
commercial contract is going to lead to a conclusion that
flouts business commonsense, it must be made to yield to
business commonsense."
16. The duty of the Court is not to delve deep into the
intricies of human mind to explore the undisclosed intention,
but only to take the meaning of words used i.e. to say
expressed intentions (Smt. Kamala Devi vs. Seth
Takhatmal & Anr 1964 (2) SCR 152). In seeking to construe
a clause in a
Contract, there is no scope for adopting either a liberal or a
narrow approach, whatever that may mean. The exercise
which has to be undertaken is to determine what the words
used mean. It can happen that in doing so one is driven to
the conclusion that clause is ambiguous, and that it has two
possible meanings. In those circumstances, the Court has to
prefer one above the other in accordance with the settled
principles. If one meaning is more in accord with what the
Court considers to the underlined purpose and intent of the
contract, or part of it, than the other, then the court will
choose former or rather than the later. Ashville
Investment v. Elmer Contractors.3 The intention of the
parties must be understood from the language they have
used, considered in the light of the surrounding
circumstances and object of the contract. Bank of India
and Anr. v. K. MohanDas and Ors4. Every contract is to
be considered with reference to its object and the whole of
its terms and accordingly the whole context must be
considered in endeavoring to collect the intention of the
parties, even though the immediate object of inquiry is the
meaning of an isolated clause. Bihar State Electricity
Board, Patna and Ors. v. M/s. Green Rubber Industries
and Ors5. {Para 15}
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 9273 of 2019
Bangalore Electricity Supply Company Limited (BESCOM). Vs
E.S. Solar Power Pvt. Ltd. & Ors.
Author: L. NAGESWARA RAO, J.
Dated: May 03, 2021.
1. These appeals arise out of a judgment of the Appellate
Tribunal for Electricity at Delhi by which the order passed by
the Karnataka Electricity Regulatory Commission (KERC) was
reversed.
2. The facts that are necessary for adjudication of the
dispute in these appeals are as follows:
(a) Karnataka Renewable Energy Development Limited
(KREDL) issued a Request for proposal on 20.11.2015
from bidders for undertaking development of Solar
PV ground mount Power Plants in Karnataka pursuant
to a decision taken by the State Government for
development of 1200 MWA of Solar power to be
implemented in 60 Taluks through private sector
participation. Emmvee Photovoltaic Power Private
Limited, the second Respondent herein, incorporated
two Special Purpose Vehicles (SPV) in accordance
with the terms of the Request for Proposal and
submitted its bid for acceptance by the first
Appellant, Bangalore Electricity Supply Company
Limited.
(b) Respondent No. 1 in Civil Appeal 9273 of 2019 is a
special purpose vehicle constituted by Respondent
No. 2 for setting up a Solar PV ground mount Project
with a capacity of 10 MWA (AC) in Bidar Rural Taluk,
Bidar District, Respondent No. 1 in Civil Appeal 9274
of 2019 is a special purpose vehicle for setting up a
20 MWA (AC) capacity Solar PV ground mount Project
in Bagepalli Taluk, Chikkaballapura.
(c) The Projects were awarded to the Respondents on
31.03.2016. Power Purchase Agreements (PPAs)
were entered into between the parties on
23.05.2016. The Power Purchase Agreements were
approved by Karnataka Electricity Regulatory
Commission (KERC) on 17.10.2016. Supplementary
Power Purchase Agreements were entered into
between the parties on 17.12.2016 incorporating the
modifications suggested by the Karnataka Electricity
Regulatory Commission on 07.12.2016.
(d) In respect of the Bidar Project, a Commissioning
Certificate was issued on 25.10.2017 by KPTCL on
the basis of minutes of meeting that was held on
16.10.2017. The Commissioning Certificate for
Bagpalli Project was also issued on 23.11.2017.
3. Original Petition (OP) No. 18 of 2018 was filed by the
Respondents in Civil Appeal 9274 of 2019 aggrieved by the
reduction of the tariff payable by Appellant No. 1 from Rs.
6.10/kWh to Rs. 4.36/kWh and imposition of damages of Rs.
20,00,000/- (Rupees Twenty Lakhs only) for delay in
commissioning the plant.
4. Apart from others, the main ground taken in the
Original Petition by the Respondents is that Commissioning of
the Project took place on 16.10.2017 which is clear from the
Minutes of meeting drawn by the Officials of KPTCL. The
meeting was attended by officers of KPTCL, officers of
GSCOM and representatives of the Respondents. It was
contended by the Respondents that the Project commenced
its operations within 12 months from the date of approval of
the PPA by the Karnataka Electricity Regulatory Commission
and the imposition of damages and reduction of tariff
payable by the Appellant was contrary to the provisions of
the agreement.
5. Original Petition No. 19 of 2018 was filed by the
Respondents in Civil Appeal 9273 of 2019 in respect of the
Solar PV ground mount Power Project in Bidar for reliefs
similar to those claimed in OP 18 of 2018.
6. The Karnataka Electricity Regulatory Commission by its
Order dated 23.10.2018 dismissed OP No. 18 of 2018 and OP
No. 19 of 2018. The Karnataka Electricity Regulatory
Commission framed four issues for consideration which are
as follows:
(i) ‘Whether the Scheduled Commissioning date’ of the
Solar Power Projects in question would fall in
16.10.2017 or 17.10.2017.
(ii) On what date the Solar Power Projects in OP No. 18 of
2018 and OP 19 of 2018 have started injection of power
into the Grid.
(iii) Whether injection of power into the State Grid from a
Solar Power Project is essential in order to declare that
a Project is commissioned.
(iv) ‘Whether Commissioning of the Project’ and
‘Commercial Operation of the Project’ are one and the
same or different concepts in a Solar Power Project.
7. Insofar as issue No. 1 is concerned the Commission was
of the view that the Scheduled Commissioning date for the
Solar Power Projects of the Developer is 16.10.2017 and not
17.10.2017 as contended by the Respondents. Considering
issues 2, 3, and 4 together, the Commission was of the
opinion that the injection of power into the Grid from a Solar
Power Project is a sine qua non for declaring that the Project
is commissioned. The Commission was of the view that the
injection of power from the Solar Power Project into the Grid
was only on 17.10.2017. In view of the above findings
recorded by the Commission, the OP’s were dismissed.
8. The Respondents approached the Appellate Tribunal for
Electricity by filing Appeal Nos.332 and 333 of 2018. The
Appellate Tribunal framed the following point for
consideration:
“Whether the Project of the Appellants was delayed by
one day in terms of Power Purchase Agreement and
whether the Commission was justified in imposing
liquidated damages on the Appellant for such delay in
commissioning the Project.”
9. The Appellate Tribunal held that the Commissioning
Date of both the Solar Plants according to KPTCL is
16.10.2017. According to the Tribunal, synchronization took
place prior to the commissioning of the Plant. The Tribunal
was also of the view that the Scheduled date of
Commissioning was done within the time limit prescribed
under the agreements even if the commencement of the
Solar Plants is taken as 17.10.2017. The Appellate Tribunal
for electricity allowed the Appeals filed by the Respondents
and set aside the orders passed by the Karnataka Electricity
Regulatory Commission. The Appellant has challenged the
said judgment of the Appellate Tribunal for Electricity in
these Appeals.
10. We have heard Mr. Tushar Mehta, the learned Solicitor
General and Mr. Balaji Srinivasan for the Appellant and Mr.
Basava Prabhu Patil, learned Senior Advocate for the
Respondents. The learned Solicitor General was critical of
the judgment of the Appellate Tribunal for its interference
with a well-considered order of the Commission. He argued
that the conclusion of the Appellate Tribunal that the SCOD is
17.10.2017 and not 16.10.2017 is contrary to the terms of
the PPA. He relied upon several clauses of the PPA to justify
that the decision taken by the Appellant to impose liquidated
damages and to reduce tariff to 4.36/kWh from 6.10/kWh.
He emphasized that injection of power to the Grid is a pre
requisite for determining the date of commissioning of a
Solar Plant. He urged that the Tribunal committed an error in
relying upon judgments relating to the General Clauses Act
when PPA excluded the applicability of the General Clauses
Act.
11. Mr. Balaji Srinivasan, took us through the documents to
argue that regulatory commission correctly interpreted the
agreement to include the first date and last date i.e. the date
on which PPA was approved by the KERC for determining the
Scheduled Commissioning Date. He took us through the
material on record to show that there was minimum
generation of power on 16.10.2017 which was utilized for
auxiliary purposes which does not satisfy the condition of
injection of power into the Grid. He submitted that it is clear
that there was no injection of power into the Grid till
17.10.2017 and the Respondents are not entitled to tariff at
the rate of 6.10/kWh. Reliance was placed on a judgment of
this Court reported in 2019 SCC online Supreme Court 1014
to argue that a Solar Power Plant is deemed to be
commissioned only when there is injection of power into the
Grid.
12. Mr. Basava Prabhu S. Patil, learned Senior Advocate
responding to the submissions made on behalf of the
Appellant contended that the twelve months period for
deciding the Scheduled Commissioning Date starts from
17.10.2016 which was the date of approval of PPA by KERC.
He referred to several covenants of the PPA to asseverate
that the date of the event i.e. the date of approval of PPA has
to be excluded for the purpose of computation of twelve
months for deciding the Scheduled Commissioning Date
(SCOD). There is no dispute regarding injection of power to
the Grid on 17.10.2017. Therefore, there is no default on the
part of the Respondents and they were unnecessarily
penalized. The alternative submission of the Respondents is
that even if 17.10.2016 is not excluded, twelve months end
on 16.10.2017 on which day the Plants were commissioned.
Computation of twelve months from 16.10.2017, in that case,
cannot be detrimental to the Respondents. He emphasized
that commissioning of the Plant is different from Commercial
Operation date. He requested this Court not to interfere with
the judgment of the Appellate Tribunal as the Respondents
have entered into an agreement on the basis of the offer
made by the Appellant to pay tariff at Rs. 6.10/kWh. Any
reduction of tariff would sound a death knell to the Solar
Plants which are going through difficult times.
13. Before we proceed further, it is necessary to have an
overview of the PPA entered into between the parties on
23.05.2016. Development of 1200 MWA of Solar Power in 60
Districts through private sector participation was a decision
taken by the State Government for improving the power
infrastructure in the State. Karnataka Renewable Energy
Development Ltd. was appointed as a Nodal agency for
facilitating the development of renewable energy in the
State. The offer made by the Respondents for setting up two
Solar PV ground mount Projects was accepted pursuant to
which an agreement was entered into. The relevant
provisions of the PPA which are relevant are as under:
Article 1.1
The words and expressions beginning with capital
letters and defined in this Agreement (including those in
Article 21) shall, unless the context otherwise requires,
have the, meaning ascribed thereto herein, and the
words and expressions defined in the Schedules and
used therein shall have the meaning ascribed thereto in
the Schedules
Article 1.2 (k)
any reference to month shall mean a reference to a
calendar month as per the Gregorian calendar;
Article1.2 (l) and (m)
any reference to any period commencing "from" a
specified day or date and "till" or "until" a specified day
or date shall include both such days or dates; provided
that if the last day of any period computed under this
Agreement is not a business day, then ·the period shall
run until the end of the next business day;
Article 1.2.4
Any word or expression used in this Agreement shall,
unless otherwise defined or construed in this
Agreement, bear its ordinary English meaning and, for
these purposes, the General Clauses Act 1897 shall not
apply.
Article 3
3.1. Effective Date
This Agreement shall come into effect from the date of
getting concurrence from KERC on the PPA and such
date shall be referred to as the Effective Date.
Article 5.1 Obligations of the Developer
5.1.1 Subject to and on the terms and conditions of this
Agreement, the Developer shall at its own coast and
expense:
(c) commence supply of power up to the Contracted
Capacity to BESCOM no later than the Scheduled
Commissioning Date and continue the supply of power
throughout the term of the Agreement;
5.4 Connectivity to the grid
The Developer shall · be responsible for power
evacuation from the Power Project to the nearest
Delivery Point/ Delivery points.
Article 5.8 – Liquidated Damages for delay in
commencement of supply of power to BESCOM
5.8.1. If the Developer is unable to commence supply of
power to BESCOM .by the Scheduled Commissioning
Date other than for the reasons specified in Clause
5.7.1, the Developer shall pay to BESCOM, · Liquidated
Damages for the delay in such commencement of
Supply of power and making the Contracted Capacity
available for dispatch by the Scheduled Commissioning
Date as per the following:
a. For the delay up to one month an amount equivalent
to 20°/o of the Performance Security.
b. For the delay of more than one (1) month and upto
two months an amount equivalent to 40°/o of the total
Performance Security. In addition to the 20% deducted
above.
c. For the delay of more than two and upto three
months an amount equivalent to 40% of . the
Performance Security in addition to the 20%+40°/o
deducted above.
For avoidance of doubt, in the event of failure to pay
the above-mentioned damages by the Developer
entitles BESCOM to encash the Performance Security.
5.8.2. In case the Developer delays the achievement of
Commercial Operation Date beyond 3 (three) months,
the Developer shall pay to BESCOM, the Liquidated
Damages at rate of INR 50,000/-
(Rupees Fifty Thousand only) per MW per day of delay
for the delay in such commissioning. Provided that the
Developer shall be required to make such payments to
BESCOM in advance on a week to week basis for the
period of delay.
5.8.3. The maximum time period allowed for
achievement of Commercial Operation Date with
payment of Liquidated Damages shall be limited to 22
(twenty two) months from the Effective Date. In case,
the achievement of COD is delayed beyond 22 (twenty
two) months from the Effective Date, it. shall be
considered as an Developer's Event of Default and
provisions of Article 16 shall apply and the Power
Project shal.1 be removed from the list of selected
projects in the event of termination of this Agreement:
ARTICLE 8: Synchronization, Commissioning and
Commercial Operation
8.1. The Developer shall provide at least forty (40) days
advanced preliminary written notice and at least twenty
(20) days advanced final written notice to BESCOM of
the date on which it intends to synchronize the Power
Project to the Grid System.
8.2. Subject to Clause 8.1, the Power Project shall be
synchronized by the Developer with the Grid System
when it meets all the connection conditions prescribed
in applicable Grid Code then in effect and otherwise
meets all other Indian legal requirements for
synchronization to the Grid System.
8.3. The synchronization equipment shall be installed
by the Developer at its generation facility of the Power
Project at its own cost The Developer shall synchronize
its system with the Grid System only after the approval
of synchronization scheme is granted by the head of the
concerned sub-station/Grid System and
checking/verification is made by the concerned
authorities of the grid system.
8.4. The Developer shall immediately after each
synchronization/tripping of generator, inform the substation
of the Grid System to which the Power Project is
electrically connected in accordance with applicable
Grid Code.
8.5. The Developer shall commission the Project
within 12 months from the Effective Date.
ARTICLE 12: APPLICABLE TARIFF AND SHARING OF
COM BENEFITS
12.1. The Developer shall be entitled to receive the
Tariff of INR6.10 / kWh of energy supplied by it to
BESCOM in accordance with the terms of this
Agreement during the period between COD and the
Expiry Date.
12.2. Provided further that as a consequence of delay
in Commissioning of the Project beyond the Scheduled
Commissioning Date, subject to Article 4, if there is
change in KERC applicable tariff, the changed applicable
Tariff for the Project shall be the lower of the following:
I. Tariff at in Clause 12.1 above
II. KERC applicable Tariff as on the Commercial
Operation Date.
ARTICLE 21: DEFINITIONS
"COD" or "Commercial Operation Date" shall mean
the actual commissioning date of respective units of the
Power Project where upon the Developer starts injecting
power from the Power Project to the Delivery Point.
"Effective Date" shall mean date of Approval of PPA
KERC;
Month" shall mean a period of thirty, (30) days from
(and excluding) the date of the event, where applicable,
else a calendar month.
Scheduled Commissioning Date" shall mean 12
(twelve) months from the Effective Date.
14. The dispute in these Appeals is whether the
Respondents did not commission the Solar Projects before
the expiry of 12 months from 17.10.2016 which is the date of
approval of PPA by KERC. The conflicting views of the parties
relate to the computation of 12 months for the purpose of
determining whether the Scheduled Commissioning Date is
16.10.2017 or 17.10.2017. According to the Appellants,
SCOD is 17.10.2017 and on the other hand the Respondents
contend that it is 16.10.2017. The other issue that falls for
consideration is whether injection of power is a pre-requisite
for deciding the Date of Commissioning of the Projects and
whether the ‘Commercial Operation Date’ and
‘Commissioning Date’ are one and the same.
15. Before embarking on the exercise of interpretation of
the agreement it is necessary to take stock of the wellsettled
canons of construction of contracts. Lord Hoffmann in
Investors Compensation Scheme Limited vs. West
Bromwich Building Society1 summarized the broad
principles of interpretation of contract as follows:
(1) Interpretation is the ascertainment of the meaning which
the document would convey to a reasonable person having
all the background knowledge which would reasonably have
been available to the parties in the situation in which they
were at the time of the contract.
(2) The background was famously referred to by Lord
Wilberforce as the "matrix of fact," but this phrase is, if
anything, an understated description of what the
background may include. Subject to the requirement that it
should have been reasonably available to the parties and to
the exception to be mentioned next, it includes absolutely
anything which would have affected the way in which the
language of the document would have been understood by a
reasonable man.
(3) The law excludes from the admissible background the
previous negotiations of the parties and their declarations of
subjective intent. They are admissible only in an action for
rectification. The law makes this distinction for reasons of
practical policy and, in this respect only, legal interpretation
differs from the way we would interpret utterances in
ordinary life. The boundaries of this exception are in some
respects unclear. But this is not the occasion on which to
explore them.
(4) The meaning which a document (or any other utterance)
would convey to a reasonable man is not the same thing as
the meaning of its words. The meaning of words is a matter
of dictionaries and grammars; the meaning of the document
is what the parties using those words against the relevant
background would reasonably have been understood to
mean. The background may not merely enable the
reasonable man to choose between the possible meanings of
words which are ambiguous but even (as occasionally
happens in ordinary life) to conclude that the parties must,
for whatever reason, have used the wrong words or syntax.
(See : Mannai Investments Co Ltd v Eagle Star Life Assurance
Co Ltd [1997] 2 WLR 945.
(5) The "rule" that words should be given their "natural and
ordinary meaning" reflects the common sense proposition
1 1998 (1) AIR 98
that we do not easily accept that people have made linguistic
mistakes, particularly in formal documents. On the other
hand, if one would nevertheless conclude from the
background that something must have gone wrong with the
language, the law does not require judges to attribute to the
parties an intention which they plainly could not have
had. Lord Diplock made this point more vigorously when he
said in The Antaios Compania Neviera SA v Salen Rederierna
AB [1985] 1 AC 191, 201:
"... if detailed semantic and syntactical analysis of words in a
commercial contract is going to lead to a conclusion that
flouts business commonsense, it must be made to yield to
business commonsense."
16. The duty of the Court is not to delve deep into the
intricies of human mind to explore the undisclosed intention,
but only to take the meaning of words used i.e. to say
expressed intentions (Smt. Kamala Devi vs. Seth
Takhatmal & Anr2). In seeking to construe a clause in a
Contract, there is no scope for adopting either a liberal or a
narrow approach, whatever that may mean. The exercise
which has to be undertaken is to determine what the words
used mean. It can happen that in doing so one is driven to
the conclusion that clause is ambiguous, and that it has two
possible meanings. In those circumstances, the Court has to
prefer one above the other in accordance with the settled
principles. If one meaning is more in accord with what the
Court considers to the underlined purpose and intent of the
contract, or part of it, than the other, then the court will
2 1964 (2) SCR 152
choose former or rather than the later. Ashville
Investment v. Elmer Contractors.3 The intention of the
parties must be understood from the language they have
used, considered in the light of the surrounding
circumstances and object of the contract. Bank of India
and Anr. v. K. MohanDas and Ors4. Every contract is to
be considered with reference to its object and the whole of
its terms and accordingly the whole context must be
considered in endeavoring to collect the intention of the
parties, even though the immediate object of inquiry is the
meaning of an isolated clause. Bihar State Electricity
Board, Patna and Ors. v. M/s. Green Rubber Industries
and Ors5.
17. Liquidated damages can be imposed on the Developer
under Article 5.8.1 if he is unable to commence supply of
power to the Appellant by the Scheduled Commissioning
Date. Article 12 deals with the applicable tariff. The
developer shall be entitled to receive the tariff of Rs.
6.10/kWh of energy supplied the Appellant in accordance
with the terms of the agreement. If there is delay in
commissioning of the project beyond the Scheduled
Commissioning Date and if there is change in KERC
3 1988 (2) All ER 577
4 2009 5 SCC 313
5 1990 (1) SCC 731
applicable tariff, Article 12.2 provides that the changed
applicable tariff for the project shall be the lower of the Tariff
as in Clause 12.1 and KERC applicable tariff as on the
commercial operation day.
18. The bone of contention is whether the Scheduled
Commissioning Date of the Solar Power Project is 16.10.2017
or 17.10.2017. We proceed to advert to the undisputed
facts. KERC approved the PPAs on 17.10.2016. Scheduled
Commissioning Date according to the agreement should be
12 months from 17.10.2016. There is also no dispute
between the parties that 12 months means 365 days.
According to the Appellants if 17.10.2016 is included in
computation of 365 days, the Scheduled Commissioning Date
is 16.10.2017. On the other hand, the Respondents
contended that 17.10.2016 should be excluded in the
calculation of 365 days, in which case, 17.10.2017 would be
the Scheduled Commissioning Date.
19. The Commission relied upon 1.2.1(m) of the PPA to
conclude that 17.10.2016 has to be included for ciphering
the period of 365 days to determine the Scheduled
Commissioning Date. Whereas, the Appellate Tribunal was of
the view that Article 1.2.1 (k) of the PPA is relevant. The
Tribunal held that the date of the event which is the date on
which the PPA was approved i.e. 17.10.2016 shall be
excluded in calculating the period of 12 months.
20. Reduction of applicable tariff is permissible under
Article 12.2 of the PPA only when there is delay in
commissioning of the Project beyond the Scheduled
Commissioning Date. As discussed above, there is no
dispute that the Scheduled Commissioning date shall be 12
months from the effective date. There is no quarrel between
the parties that the effective date is 17.10.2016. The
interpretation clause contains three provisions which are
1.2.1 (k), 1.2.1 (l) and 1.2.1 (m). According to 1.2.1 (k), any
reference to a month shall mean a reference to a Calendar
month as per the Gregorian Calendar. 1.2.1 (l) provides that
references to any date or period shall mean and include such
date, period as may be extended pursuant to the agreement.
As per Article 1.2.1 (m), any reference to any period
commencing from a specified date and until the specified
day shall include both such day or dates. The other crucial
provision which has to be taken note of is the definition of
the expression ‘Month’ in Article 21.1 of the agreement.
Month has been defined to mean a period of 30 days and
excluding (the date of the evet) where applicable, else a
Calendar month. We are not concerned with 1.2.1 (l), in this
case as there is no question of any extension of any period
pursuant to the agreement. 1.2.1 (k) indicates that any
reference to a month shall mean reference to a Calendar
month. Reverting to the definition of ‘Month’, it is clear that
a month shall mean either 30 days where applicable or a
Calendar month. In this case, there is no dispute that 12
Calendar months have to be taken into account for
determining the Scheduled Commissioning Date. The crucial
expression in the definition of ‘Month’ is “excluding the date
of the event”. If the date of the event i.e. 17.10.2016 is
excluded, the Scheduled Commissioning Date would be
17.10.2017. We do not agree with the conclusion of the
Commission that the definition of month is with reference
only to one month and not more which is wrong a reading of
the provision. The Commission applied 1.2.1 (m) which
refers to a period commencing from a specified date to a
specified day for the purpose of including the date of the
event. In our view, the Commission has committed an error
in applying 1.2.1 (m) when the provision that is applicable is
1.2.1 (k) read with the definition of month in Article 21.1.
There is a specific mention of ‘twelve months’ in the
definition of ‘SCOD’ and Article 1.2.1 (k) categorically
provides that any reference to a ‘Month’ shall be a calendar
month. Applicability of Article 1.2.1 (k) excludes the
operation of Article 1.2.1 (m) to the facts of this case.
21. The next contention of the Appellant is that actual
injection of power into the Grid was on 17.10.2017 and as
the Scheduled is 16.10.2017, the reduction of the tariff in
view of the delay of 1 day in commissioning is justified. The
alternate submission that is made by the Respondents that
even assuming that the Scheduled Commissioning Date is
16.10.2017 and not 17.10.2017, the Respondents
commissioned the Solar Plants on 16.10.2017 itself.
According to the Respondents, the Appellant committed an
error in penalizing the Respondents on a wrong premise that
the actual injection of power is required to show that the
Solar Plants were commissioned. The Commission answered
the point in favour of the Appellants by holding that actual
injection of power is necessary to determine the date of
commissioning of the Plant. The Appellate Tribunal reversed
the findings recorded by the Commission on this aspect by
relying upon the Commissioning certificate issued by the
KPTCL which is to the effect that the Solar Plants were
commissioned on 16.10.2017 itself. There is no dispute that
the power was injected from the solar plants on 17.10.2017.
In view of the conclusion reached by us on the issue relating
to the Scheduled Commissioning Date being 17.10.2017, it is
not necessary to adjudicate the point relating to the
requirement of actual injection of power into the Grid to
decide the date of commissioning. At the request of Mr.
Balaji Srinivasan, learned counsel for the Appellant, four
weeks time is granted to implement the judgment of the
Appellate Tribunal.
22. For the aforesaid reasons, the judgment of the
Appellate Tribunal is upheld and the Appeals are dismissed.
..................................J.
[ L. NAGESWARA RAO ]
...............................J.
[ VINEET SARAN ]
New Delhi,
May 03, 2021.
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