Holding

Statutory notifications issued under s.43(A) of the Electricity Supply Act, 1948 are binding on the parties and supersede any contractual terms, rendering the incentive non‑payable and upholding the lower authorities' limited refund and interest determinations.

Summary

The Gujarat Electricity Board (Gujarat Urja) and CLP India entered into a 1994 Power Purchase Agreement (PPA) for 635 MW of electricity. A 1995 Central Government notification amended the 1992 tariff notification, removing the deemed generation incentive for naphtha‑based plants. Gujarat Urja sought recovery of incentive payments made to CLP from 1997‑2005, while CLP claimed interest on a deemed loan of Rs 53.90 crore for periods before July 2003. The Gujarat Electricity Regulatory Commission (GERC) and the Appellate Tribunal for Electricity (APTEL) held that the 1995 amendment was binding, that only three years of excess payments could be recovered, and that CLP was not entitled to interest prior to July 2003. The Supreme Court affirmed that statutory notifications under s.43(A) of the Electricity Supply Act, 1948 override contractual terms, that the change‑of‑law clause in the PPA incorporates such notifications, and that the lower authorities' findings on limitation and interest were reasonable. Consequently, both appeals were dismissed.

Issues considered

The amendment notification of 06‑11‑1995 under s.43(A) of the Electricity Supply Act, 1948 is binding and overrides the PPA's incentive provisions.
Whether the GERC and APTEL were correct in limiting the refund of deemed generation incentive to the three‑year period preceding Gujarat Urja's application.
Whether CLP is entitled to interest on the deemed loan component (Rs 53.90 crore) for periods prior to 01‑07‑2003.
Whether the change‑of‑law clause in the PPA incorporates statutory tariff notifications and prevents parties from contractually overriding them.
Whether the PPA constitutes a statutory contract subject to the provisions of the Electricity Supply Act, 1948.

Legislation cited

Subjects

Power Purchase AgreementElectricity tariffStatutory notificationSection 43(A) Electricity Supply ActDeemed generation incentiveLimitation periodInterest on deemed loanChange of law clauseRegulatory authority

Judgment

598 [2020]REPORTS
SUPREME COURT 6 S.C.R. 598 [2020] 6 S.C.R.

A CLP INDIA PVT. LTD.
v.
GUJARAT URJA VIKAS NIGAM LTD. & ANR.
(Civil Appeal No. 2793 of 2010)
B MAY 06, 2020
[ARUN MISHRA, VINEET SARAN AND
S. RAVINDRA BHAT, JJ.]
Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity
Board (Gujarat Urja) entered into a power purchase agreement
C
(PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja
was under an obligation to purchase and CLP was under the
corresponding obligation to supply electricity – Prior PPA, the
Central Government had issued notification on 30.03.1992, one of
the conditions in it was the provision for incentive to units using
D naphtha – After the signing of the PPA, an amendment notification
dated 06.11.1995 was issued by the Central Government amending
the notification (dated 30.03.1992), which provided that there would
no longer be any deemed Generation Incentive payable to any
generating company on available declaration of naphtha as fuel –
Gujarat Urja sought to enforce said notification – However, CLP
E
ignored the amended notification and billed Gujarat Urja for the
power supplied, w.e.f. December, 1997 and Gujarat Urja paid
deemed Generation Incentive – Thereafter, Gujarat Urja filed
application for recovery of the amounts from CLP paid during the
period from 1997-1998 to 2005-06 – GERC, by its order held that
F the notification of 06.11.1995 was applicable and deemed
Generation Incentive is not payable to CLP – However, it permitted
recovery of only for a period of three years prior to the date of
filing of the petition: the recovery for the period prior to 14.09.2002
was held to be time-barred – APTEL upheld the order of the GERC
– On appeal, held: The two notifications dated 30.03.1992 and
G
06.11.1995 were issued u/s. 43(A) of the Electricity Supply Act, 1948
– Concededly, these notifications are statutory and are binding on
the parties – Any PPA between a generating company and the
purchaser of electricity is subject to such statutory notifications;
parties by agreement cannot override statutory provisions, or such
H notifications, as far as they relate to matters of tariff – So, the
598
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 599

notification amended on 06.11.1995 was a statutory one and was A
binding on both the parties – The effect of this statutory
incorporation by way of amendment was that incentive no longer
became payable – Also, the concurrent findings of the GERC and
APTEL in granting restricted refund calculable for the 3 year period
prior to Gujarat Urja’s application are reasonable – The findings
B
of the lower authorities, therefore, are correct; no interference
required.
Electricity Supply Act, 1948 – s.43(A) – Gujarat Electricity
Board (Gujarat Urja) entered into a power purchase agreement
(PPA) with CLP on 03.02.1994 – In terms of the PPA, Gujarat Urja
was under an obligation to purchase and CLP was under C
corresponding obligation to supply electricity – A supplementary
agreement was executed between the parties on 05.12.2003 – CLP
stated that the amount, i.e Rs. 53.90 crores was in fact due as a
loan – If it was deemed as a loan, then interest was payable on the
basis of normative repayment of principal amount during the period D
of the loan, i.e. the loan would not remain as a constant – Gujarat
Urja resisted this claim – The GERC rejected the CLP’s argument
on a plain reading of the clause in the supplementary agreement,
which stated that the agreement too recognized Rs.53.9 crores as
own Capital for which the cost of Own Capital @ 14% was to be a
pass through – The effective date for such recognition was from E
01.07.2003 to 31.03.2009 and no amounts were due and payable
as interest after that date – This excluded any liability on part of
Gujarat Urja for the past period, i.e. December 1997 – The CLP
Limited was aggrieved by that portion of GERC’s order which
rejected its claim on the deemed loan component prior to the period F
2003 – The APTEL concurred with the decision of GERC – On
appeal, held: The clear agreement between the parties was that
interest on the sum of Rs.53.90 crores was payable for the specified
period 01.07.2003 to 31.12.2009 – Therefore, CLP’s claim that any
amount was payable, for any period prior to 01.07.2003, was not
tenable – Had CLP wished so, nothing prevented it to claim for it G
during negotiations and have it included as a term of the contract –
Once having settled for a specified sum, on an amount Rs.53.90
crores that was only fictionally a loan - and treated as such, for
purpose of fixing interest payable, considering the equity infused,
in excess of the tariff regulations, the absence of any like item, H
600 SUPREME COURT REPORTS [2020] 6 S.C.R.

A such as interest for prior period, precludes a claim – The findings
of the lower authorities are therefore, sound and reasonable.
Dismissing the appeals, the Court
HELD: 1. The submissions of parties are with respect to
two notifications dated 30.03.1992 and 06.11.1995. These
B Notifications were under Section 43(A) of the Supply Act.
Concededly, these notifications are statutory and are binding on
the parties. Any PPA between a generating company and the
purchaser of electricity is subject to such statutory notifications;
parties by agreement cannot override statutory provisions, or
C such notifications, as far as they relate to matters of tariff.
Therefore, the rights and obligations of the parties under the
PPA have to be read subject to the statutory provisions. The
provisions of the PPA, if they are contrary to the statutory
provisions, cannot be given effect to. [Paras 19 and 20][611-D-F]
D 2. In view of the fact that the notification amended on
06.11.1995 was a statutory one, there cannot be any doubt that it
was binding upon the parties. Therefore, the earlier notification
which left it free to the parties to negotiate on various aspects,
including on the incentive payable, stood amended by Note 2,
which was added to clause 1.6 of the tariff. The effect of this
E statutory incorporation by way of amendment was that incentive
no longer became payable. The arguments by the CLP, in the
opinion of the Court, that the parties were bound only by the
terms of the agreement and that the amendment notification being
prospective, could not have altered the terms of the tariff,
F especially the incentive payable, are insubstantial and have no
force. The concurrent findings on this aspect, therefore, are sound
and do not call for interference. Likewise, the change of law
provision (Clause 6.5 of the PPA) clearly contemplated that any
amendment to the prevailing tariff notification (dated 30.03.1992)
would bind the parties. Since Note (2) was an amendment, which
G dealt with the issue of incentive, it cannot now be said that it was
inapplicable. The findings of the lower authorities, therefore, are
correct; no interference is called for. [Para 25][614-D-F;
615-A-B]

H
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 601

3. The next question is whether the GERC and APTEL fell A
into error in granting restricted refund calculable for the 3 year
period prior to Gujarat Urja’s application. The concurred findings
on this aspect, in the opinion of this court, are reasonable. There
is merit in CPL’s submission that the earliest point in time, when
the cause of action arose, was in May,1996, when Gujarat Urja
B
rejected its contention that incentive was payable in terms of the
PPA, notwithstanding the notification of 06.11.1995. Despite this
stated position, meetings continued to be held and, what is more,
incentive amounts, were paid to CLP. No doubt, no document
conclusively stated that CLP’s claim was accepted. This Court
does not find any merit in the submission of Gujarat Urja that the C
issue was kept alive, due to a series of communications. In this
regard, APTEL’s findings about inapplicability of Section 18 of
the Limitation Act, are correct. There was no admission on the
part of CLP, at least of the kind, that extended the time for
preferring an application for recovery of excess payments. It has
D
been consistently ruled by this court that repeated letters, or
exchange of communications, do not extend the period of
limitation, provided by law. [Para 26][615-B-E]
4. The third, and last issue, is with respect to payment of
interest on deemed equity. The debt-equity ratio in this case,
was disturbed; accordingly Rs.53.9 crores was treated as E
“deemed” or normative loan, for which the parties had to agree
the rate of interest payable, in accordance with the tariff
notification. It was in the light of these developments that the
supplementary agreement was entered into. [Para 28][616-B]
5. It is apparent, that the parties did not harbor any doubt F
about the period for which the specified interest was payable on
such deemed loan. The rate of interest was fixed; likewise, the
date from which payment obligations were to arise, too were
known. Also, the date upto which the interest on such deemed
loan payments were to be made, was known and fixed. In these G
circumstances, CLP’s claim that the payment of interest for a
prior period was outstanding, and constituted Gujarat Urja’s
liability, is insubstantial. In a recent judgment a similar issue had

H
602 SUPREME COURT REPORTS [2020] 6 S.C.R.

A arisen. The court quoted from the decision in National Thermal
Power Corporation Ltd. v. Madhya Pradesh State Electricity Board
where another previous decision was cited with approval on the
issue that the express provision for something, in an agreement,
meant that other similar matters stood excluded. [Para 29]
[616-D-F]
B
6. In the present case, the clear agreement between the
parties was that interest on the sum of Rs.53.90 crores was
payable for the specified period 01.07.2003 to 31.12.2009.
Therefore, CLP’s claim that any amount was payable, for any
period prior to 01.07.2003, was not tenable. Had CLP wished so,
C nothing prevented it to claim for it during negotiations and have
it included as a term of the contract. Once having settled for a
specified sum, on an amount (Rs.53.90 crores) that was only
fictionally a loan - and treated as such, for purpose of fixing interest
payable, considering the equity infused, in excess of the tariff
D regulations, the absence of any like item, such as interest for
prior period, precludes a claim. But it was really part of the equity
component. Therefore, interest was per se not payable, but could
be paid in terms of the tariff notification or the agreement. No
claim on any other legal or equitable considerations could have
been made. The findings of the lower authorities are therefore,
E sound and reasonable. [Para 31][619-E-G]
India Thermal Power Ltd. v. State of M.P. & Ors. (2000)
3 SCC 379 : [2000] 1 SCR 925; Binani Zinc Ltd. v.
Kerala State Electricity Board (2009) 11 SCC 244 :
[2009] 4 SCR 636; Tata Power Company Ltd. v. Adani
F Electricity Mumbai Ltd. & Ors. 2019 (7) SCALE 297 :
[2019] 6 SCR 845; Damodar Valley Corporation v.
Central Electricity Regulatory Commission & Ors. 2018
(15) SCALE 451 : [2018] 14 SCR 433 – relied on.
Hari Shankar Singhania v. Gaur Hari Singhania (2006)
G 4 SCC 658 : [2006] 3 SCR 726; Sri Ram Mills Ltd. v.
Utility Premises Ltd. (2007) 4 SCC 599 : [2007] 4 SCR
279; S.S. Rathore v. State of Madhya Pradesh (1989) 4
SCC 582 : [1989] 1 Suppl. SCR 43; Union of India v.
Har Dayal (2010) 1 SCC 394 : [2009] 15 SCR 1126;
H
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 603

Schlumberger Asia Services Ltd. v. Oil and Natural Gas A
Corporation Ltd. (2013) 7 SCC 562; Uttar Haryana
Bijli Vitran Nigam Ltd. And Ors. v. Adani Power Ltd. &
Ors. (2019) 5 SCC 325 : [2019] 4 SCR 487; National
Thermal Power Corporation Ltd. v. Madhya Pradesh
State Electricity Board (2011) 5 SCC 580 : [2011] 11
B
SCR 651 – referred to.
Case Law Reference
[2006] 3 SCR 726 referred to Para 16
[2007] 4 SCR 279 referred to Para 16
C
[2000] 1 SCR 925 relied on Para 23
[2009] 4 SCR 636 relied on Para 23
[2019] 6 SCR 845 relied on Para 23
[1989] 1 Suppl. SCR 43 referred to Para 26
D
[2009] 15 SCR 1126 referred to Para 26
(2013) 7 SCC 562 referred to Para 26
[2019] 4 SCR 487 referred to Para 29
[2011] 11 SCR 651 referred to Para 29 E
[2018] 14 SCR 433 relied on Para 30
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2793
of 2010.
From the Judgment and Order dated 19.01.2010 of the Appellate
F
Tribunal for Electricity, New Delhi in Appeal No. 44 of 2009.
With
C. A. No. 2969/2010
Sajjan Povaya, C. A. Sundaram, Sr. Advs., V. Mukherjee,
Pukhrambam Ramesh Kumar, Ms. Raveena Dhamija, Karun Sharma, G
Akshat Jain, Prati Bhanu, Anand Ganesan, Ms. Hemantika Wahi,
Shubham Arya, Ms. Jesal Wahi, Ms. Puja Singh, Ms. Rohini Musa,
Abhishek Gupta, Zafar Inayat, Ms. Ranjitha Ramachandran, Ms. Puja
Singh, Advs. for the appearing parties.
H
604 SUPREME COURT REPORTS [2020] 6 S.C.R.

A The Judgment of the Court was delivered by
S. RAVINDRA BHAT, J.
1. The present judgment will dispose of two appeals preferred
under Section 125 of the Electricity Act, 2003. One appeal
(CA 2969/2010) has been preferred by the Gujarat Urja Vikas Nigam
B Ltd. (hereafter,”Gujarat Urja”or “GUVN”); the second (CA 2793/2010)
has been preferred by CLP (India) Pvt. Ltd. (formerly, Gujarat Torrent
Energy Corporation Ltd; later, Gujarat Paguthan Energy Corporation
Ltd, a generating company, hereafter collectively “CLP”). Both appeals
challenge a common order of the Appellate Tribunal for
C Electricity”APTEL” hereafter).
2. The erstwhile Gujarat Electricity Board (GEB) (now “Gujarat
Urja”) entered into a power purchase agreement (“PPA”with CLP on
03.02.1994. In terms of the PPA, Gujarat Urja was under an obligation
to purchase - and CLP was under corresponding obligation to supply -
D 635 MW of electricity; the tenure of the agreement was 20 years. In
terms of Section 43(A) of the Electricity Supply Act, 1948, (hereafter
"the Act"), a generating company may enter into a contract for the sale
of electricity with the Electricity Board and the tariff for the sale of
electricity shall be determined by the authority through the notification
issued by the Central Government. Prior the PPA in this case, the Central
E Government had issued a notification under Section 43A, on 30.03.1992,
specifying the controlling norms, terms and conditions for determination
of tariff for sale of electricity by the generating company to the Electricity
Boards. One of those conditions was the provision for incentive to units
using naphtha. On 17.01.1994, an amendment to the notification dated
F 30.03.1992 was made providing for Note (1) stating that the incentive
for generation above the target availability of 68.49% for fixed cost
recovery was to be capped.
3. After the signing of the PPA between the parties, an amendment
notification dated 06.11.1995 was issued by the Central Government
G amending the notification (dated 30.03.1992). By this, the Central
Government provided that there would no longer be any deemed
Generation Incentive payable to any generating company on available
declaration of Naphtha as fuel. Based on this notification, the Electricity
Board sought to enforce the said notification claiming that this generating
company is not entitled to get the incentive for deemed generation. The
H Electricity Board also sent a letter dated 18.04.1996 informing the CLP,
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 605
[S. RAVINDRA BHAT, J.]

that it proposed to amend the Clause 7.5.2.1 of the PPA to the effect A
that no deemed generation shall be admissible beyond the level of
generation in respect of Naphtha. CLP did not agree to the proposal and
by its reply dated 24.04.1996 stated that the notification of 06.11.1995
was inapplicable. Gujarat Urja did not agree to CLP’s position and
reiterated its earlier position about the change in the incentive terms. A
B
meeting was held in respect of various issues on 06.10.1997 during which
several issues were discussed and decisions taken, between the parties.
However, the minutes of meeting did not record any decision on the
issue of incentive restricted in terms of the notification dated 06.11.1995.
There was some more correspondence and meetings, which however,
did not lead to any result in regard to both parties accepting that the C
incentive was payable in terms of the notification of November,1995.
Ultimately, with effect from December 1997, CLP started billing Gujarat
Urja for the power supplied, including the incentive (ignoring the amending
notification); Gujarat Urja continued to pay deemed generation incentive
from June, 1998 to 2000.
D
4. The Union Ministry of Power issued a notification (dated
09.06.1998) which clarified profits on operating norms; several
components such as station heat rate, auxiliary consumption and
secondary fuel consumption were eliminated and income tax on incentives
was no longer permitted (as a pass through in tariff). It was stated that
this was prospective in operation and would apply to power purchase E
agreements which were not executed and delivered by the parties by
09.06.1998. For a long time, incentive continued to be paid, ignoring the
notification of 06.11.1995 by Gujarat Urja, to CLP. On 05.12.2003, CLP
and Gujarat Urja entered into a supplementary agreement, amending
the PPA, to incorporate concessions offered by CLP to reduce tariff. F
Pursuant to execution of the supplementary agreement dated 05.12.2003,
Gujarat Urja issued a letter to CLP stating that all the outstanding issues
stood fully and finally resolved. Gujarat Urja continued to pay deemed
generation incentive from 05.12.2003 to 23.02.2005. In February, 2005,
a high-level committee was constituted to examine the issue of recovery
of excess payouts made on the basis of deemed generation incentive. G
The receipt of the report, of that committee, led Gujarat Urja to file an
application for recovery of the amounts from CLP (Petition No.874/
2006 under Section 86(1)(f) of the Act, before the Gujarat Electricity
Regulatory Commission (“GERC”), claiming for recovery of deemed
generation incentive paid to CLP during the period from 1997-98 to 2005- H
06.
606 SUPREME COURT REPORTS [2020] 6 S.C.R.

A 5. CLP resisted Gujarat Urja’s application, contending that
principles of estoppel precluded recovery; that in any event, parties had
not agreed to change the terms of the PPA and that the previous
correspondence evidenced that the matter had been closed, which meant
that Gujarat Urja could not claim recovery of any so-called excess
amounts. The GERC, by its order held that Note 2 (introduced by the
B
notification of 06.11.1995) was applicable to the project and thus deemed
generation incentive is not payable to CLP. However, it permitted recovery
of only for a period of three years prior to the date of filing of the petition:
the recovery for the period prior to 14.09.2002 were held to be time-
barred.
C 6. The second appeal, i.e. CA 2793/2010 by CLP Limited, questions
the impugned order of the APTEL which had upheld the rejection of its
claim for interest on deemed loan component.
7. The facts as far as this appeal is concerned are that a
supplementary agreement was executed between the parties on
D 05.12.2003. In terms of Article 4.6 of the Supplementary Agreement,
original clause 7.5.14(a) of the PPA dated 03.02.1994 was substituted 1 .
CLP stated that the amount, i.e ` 53.90 crores was in fact due as a loan.
If it was deemed as a loan, then interest was payable on the basis of
normative repayment of principal amount during the period of the loan,
E i.e. the loan would not remain as a constant. In this regard, CLP had
relied upon Clause 1.5 of the notification dated 30.03.19922. The PPA
dated 03.02.1994 by Schedule VII Clause 7.5.10 defined “Interest on
Loan Capital” in the following terms:
7.5.10: Interest on Loan Capital-shall mean the sum of all
F payment of interest along with bank charges and all
associated financing costs paid to the bank annually on the
outstanding loans paid by GTEC, converted, as of the first
day of the fortnight for the applicable fixed charge, into the
1
The substituted term, i.e. the new clause 7.5.14(a) reads as follows:
“The parties have agreed to recognize an amount of Rs.53.90 crores as”Own
G Capital”deployed to meet with the Capital Cost and allowance of Payment of cost in the
form of “Cost of Own Capital”@ the rate of 14% per annum effective from 1.7.2003 and
up to 31.12.2009. No payment of any nature will accrue after the said date on the said
amount.”
2
Clause 1.5 reads as follows:
“1.5…………….(a) Interest on loan capital shall be computed on the outstanding loans,
including the schedule of repayment, as per the financial package approved by the
H Authority…..”
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 607
[S. RAVINDRA BHAT, J.]

currencies in which it is payable employing exchange rates A
at bank’s selling rate prevailing on that day obtained from
the source mutually agreed.”
8. The CERC Tariff Regulations, 2001 which provided for
“Interest on loan capital”[clause 2.7(a)] and CERC Tariff
Regulations, 2004 were relied upon. B
They are set out below:
‘‘2.7(a)Interest on loan capital
Interest on loan capital shall be computed on the outstanding
loans, duly taking into account the schedule of repayment as C
per the financial package approved by the Authority or an
appropriate independent agency, as the case may be.”
9. CERC Tariff Regulations, 2004 inter alia provides as under:
“20.Debt-Equity Ratio:(1) In case of alia generating
stations, declared under commercial operation on or after D
1.4.2004,debt-equity ratio as on the date of commercial
operation shall be 70:30 for determination of tariff. Where
equity employed is more than 30%,the amount of equity
for determination of tariff shall be limited to 30% and the
balance amount shall be considered as the normative loan.
E
Provided that in case of a generating station where actual
equity employed is less than 30%, the actual debt and equity
shall be considered for determination of tariff.
(2) The debt and equity amount arrived at in accordance
with clause (1) shall be used for calculating interest on F
loan, return on equity, Advance against Depreciation and
Foreign Exchange Rate Variation.”
10. Gujarat Urja resisted this claim. After adjudication, the GERC
rejected the CLP’s argument on a plain reading of the clause, saying
that for the first time in the supplementary agreement, which stated that G
the agreement too recognized ` 53.9 crores as own Capital for which
the cost of Own Capital @ 14% was to be a pass through. The effective
date for such recognition was from 01.07.2003 to 31.03.2009 and no
amounts were due and payable as interest after that date. It was
specifically stated that this condition constituted the complete bargain to
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608 SUPREME COURT REPORTS [2020] 6 S.C.R.

A the extent it provided for treatment of cost of Own Capital @ 14% per
annum for a defined period. The agreement had to be and was given
prospective operation. This excluded any liability on part of Gujarat Urja
for the past period, i.e. December 1997. It was also held that the claim
made in 2010 was substantially barred to the extent it sought for any
amount of interest beyond a period of three years.
B
11. The CLP claimed on another issue, i.e. interest on ` 14.48
crores @ 16% per annum from July 2000 to 30.06.2003 was payable. In
terms of the supplementary agreement, the condition specifically stated
that GPEC (i.e. CLC) had further deployed a sum of ` 14,48,40,831/-
from its internal accrual to complete shortfall and disbursal of loan by
C the lenders, which agreed to allow payment on this amount @ 16% per
annum from July 2000 to 30.06.2012. Gujarat Urja stated that this interest
was payable on reducing balance terms, not as bullet payment of interest.
12. The CERC ruled that it was quite clear that the parties had
agreed to allow interest at the said rate, @ 16% on the said sum, i.e.
D 14.48 crores. Therefore, Gujarat Urja could not argue that interest was
payable on the reducing balance method and that the payment of interest
on a bullet repayment method was not permissible. The Commission,
i.e. GERC noted that the statutory notification, i.e. clause 1.5 of the
notification dated 30.03.1992 did not prohibit calculation of interest on
E bullet repayment as regards clause 7.5.10 in Schedule VII of the PPA
dated 03.02.1994, the subject matter or its content was deemed loan.
On this second aspect, therefore, the terms of the contract contained in
the supplementary agreement directing 16% per annum interest on `14.48
crores is bullet repayment, was upheld.

F 13. The CLP Limited was aggrieved by that portion of GERC’s
order which rejected its claim on the deemed loan component prior to
the period 2003. It appealed to the APTEL (Appeal No.44/2009). The
APTEL concurred with the decision of the GERC and held that clause
7.5.14(a) of the supplementary agreement did not oblige Gujarat Urja to
refund interest paid upon the deemed loan component upon the equity
G portion treated as deemed loan, i.e. ‘ 53.9 crores for any period prior to
01.07.2003. Therefore, CLP’s appeal was rejected. It, therefore, has
appealed to this Court on the said findings.
Analysis and Findings
14. Section 43A of the Electricity (Supply) Act, 1948 (hereafter
H
“the Supply Act”) reads as follows:
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 609
[S. RAVINDRA BHAT, J.]

“43A. Terms, conditions and tariff for sale of electricity by A
Generating Company.-
(1) A Generating Company may enter into a contract for the
sale of electricity generated by it-
a) with the Board constituted for the State or any of the States
in which a generating station owned or operated by the B
company is located;
b) with the Board constituted for any other State in which it is
carrying on its activities in pursuance of sub-section(3) of
section 15A; and
C
(c) with any other person with consent of the competent
government or governments.
(2) The tariff for the sale of electricity by a Generating
Company to the Board shall be determined in accordance with
the norms regarding operation and the Plant Load Factor as D
may be laid down by the Authority and in accordance with
the rates of depreciation and reasonable return and such other
factors as may be determined, from time to time, by the Central
Government, by notification in the Official Gazette:
Provided that the terms, conditions and tariff for such sale E
shall, in respect of a Generating Company, wholly or partly
owned by the Central Government, be such as may be
determined by the Central Government and in respect of a
Generating Company wholly or partly owned by one or more
State Governments be such as may be determined, from time
to time, by the government or governments concerned.” F
15. At the outset, it is noticeable that on the issue, whether amounts
paid to CLP, for the period 1998 to 2005 onwards, were in excess of
what was actually payable by Gujarat Urja, the findings of GERC and
the APTEL are concurrent. This court does not discern any
unreasonableness or facial omission of material factors, to warrant G
appellate review. Nevertheless, the court would proceed to deal with
the submissions made on this aspect. Gujarat Urja contends that the
concurrent findings, to the extent they limit the refund to a period up-to
2002 are erroneous, because in effect CLP has been unjustly enriched.
Learned senior counsel for Gujarat Urja, Mr. C.A. Sundaram, argued
H
610 SUPREME COURT REPORTS [2020] 6 S.C.R.

A that once the GERC found, on a plain reading and interpretation of the
tariff order of 1992 – as amended by the notification dated 06.11.1995,
that incentive could not be paid in the same manner as was contemplated
by the parties, when they entered into the PPA (on 03.02.1994), as a
matter of law, the amounts paid were excess; consequently, both in law
as well as in equity, CLP was under an obligation to refund the entire
B
excess, from the time it was not entitled to those amounts.
16. On the question of limitation, learned senior counsel argued
that the APTEL erred in law, in not following the decisions of this court
in Hari Shankar Singhania v. Gaur Hari Singhania3 and Sri Ram
Mills Ltd.v. Utility Premises Ltd.4 in considering that the issue was not
C time-barred. Counsel submitted that the question was engaging the
attention of the parties and CLP was aware of the fact that the Central
Electricity Authority and the Central Government had taken decisions
on this aspect. Moreover, as a matter of law, by reason of the amendment,
to the notification (dated 06.11.1995), CLP could not have legitimately
D claimed more tariff based on the incentive policy that was no longer
applicable. Therefore, the amounts paid to the extent they were not in
conformity with the said amendment, had to be refunded in entirety.
17. On behalf of CLP it was urged, by Mr. Sajan Poovayya, learned
senior counsel, that both the authorities below erred in their interpretation
E of the terms of the PPA, the notification of 30.03.1992 and the amendment
of 06.11.1995. It was argued that CLP’s generation station is gas-based
and not a Naphtha based station. The notification dated 06.11.1995 applied
only to 100% Naphtha based stations and not to gas based stations like
that of CLP, where Naphtha was used as a secondary fuel when the
Gas was not available. The expression “Naphtha based station” used in
F the notification is a term of art; it refers merely to the physical
characteristic of the plant and not to the nature of fuel to be used. It was
further contended that the amending notification of 06.11.1995 itself
makes a distinction between gas based stations and naphtha based
stations. CLP’s plant, in terms of PPA is a gas based, not Naphtha based.
G Therefore, the notification dated 06.11.1995 would not apply to its plant.
Also, urged counsel, since the PPA was entered into on 03.02.1994, the
amendment notification dated 06.11.1995 would not apply to the pre-
existing PPA, since it has a prospective effect. It was lastly submitted
3
(2006) 4 SCC 658
4
H (2007) 4 SCC 599
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 611
[S. RAVINDRA BHAT, J.]

that Clause 6.5 of the PPA dated 03.02.1994 regarding change of law is A
clarificatory in nature. It deals only with the earlier part to protect the
interest of the GPEC for change in law. “The change in law” referred to
in Clause 6.5 covers amendment to notification dated 30.03.1992.
Therefore, the financial difficulties resulting from the amendment
notification dated 06.11.1995 are to be compensated in favour of the
B
CLP.
18. It was argued that Note(2) of the amended notification dated
06.11.1995 unambiguously states that it applies only to Naphtha based
stations for whom generation incentive was inapplicable. Therefore, the
gas based units like CLP were clearly not covered by Note(2) since
C
they used naphtha only as an alternative fuel or substitute fuel. Therefore,
the findings given by the GERC and APTEL to the effect that Naphtha
based station include those that are capable of firing Naphtha also as a
fuel, and not mean those which are capable of firing only Naphtha, is
wrong.
19. The submissions of parties are with respect to two notifications D
dated 30.03.1992 and 06.11.1995. These Notifications were under Section
43(A) of the Supply Act. Concededly, these notifications are statutory
and are binding on the parties. Any PPA between a generating company
and the purchaser of electricity is subject to such statutory notifications;
parties by agreement cannot override statutory provisions, or such E
notifications, as far as they relate to matters of tariff.
20. Therefore, the rights and obligations of the parties under the
PPA have to be read subject to the statutory provisions. The provisions
of the PPA, if they are contrary to the statutory provisions, cannot be
given effect to. In terms of the PPA of 03.02.1994, “fuel” is defined as F
follows:
“Fuel natural gas and/or any liquid fuel selected by Gujarat
Torrant Electricity Company (GTEC) (now CLP) for use in
power station for generating electricity”
‘fuel management’ is defined as follows: G
“Fuel Management:-The power station of the GTEC is
designed to use natural gas and liquid fuel as fuel. GTEC
shall decide selection and use and proportion gas and other
fuel in best economic way depending on the situation from
time to time.” H
612 SUPREME COURT REPORTS [2020] 6 S.C.R.

A 21. The kind of alternative fuel and its long-term purchase contract
could be jointly decided by CLP and Gujarat Urja. The cost of the alternate
fuel when used by CLP shall be taken into account for calculation of
variable charges as defined in Schedule VII (of the PPA). Clause 7.1
and Clause 7.4 of Schedule VII to the PPA are relevant. 5 Under the
former, Gujarat Urja had to purchase power from CLP on the basis of the
B notification of 30.03.1992 of the Central Government. It further provided that
the tariff for the first 6000 Kwh/kw (i.e 68.5% PLF – i.e. plant load factor) of net
availability in any year was to be the sum of (a) the fixed charge and (b) the
variable charge (i.e those terms defined by clauses 7.2 and 7.3). For all excess
energy of actual and deemed generation in excess of 68.5%, the tariff payable
was to be the sum of (a) incentive and (b) variable charge. Clause 7.4 provided
C for incentive, which was to be @ 0.575% for every 1% increase in the generation
above the normative level of 6000 hours per kWH/KW (i.e 68.5% PLF) in
accordance with the notification S.O. 251(E), dated 30.03.1992 (as amended on
17.01.1994).
22. The argument of CLP that its unit was essentially gas-based
D and that the definition of naphtha-based unit meant only that unit which
depended entirely on naphtha as a fuel, or that which used naphtha at
least to the extent of 50%, in our opinion is not correct.
23. The judgment of this court in India Thermal Power Ltd. vs.
State of M.P. & Ors.6 is an authority for the proposition that parties can
E 5
For convenience,they are set out as follows:
“7.1 Tariff
GEB shall purchase power from GTEC, generally on the basis of GOI notification
No.SO 251(E) dtd. 30-3-1992. The Tariff for the first 6,000 kWH/KW (i.e. 68.5 PLF) of
Net Availability in any year during the terms of this Agreement shall be the sum of (a)the
Fixed Charge and (b) the Variable Charge. For all the energy of actual and deemed
F generation in excess of 68.4 % PLF in any Year ,the Tariff payable by GEB shall be the
sum of (a) the Incentive described below and (b) the Variable Charge. Any tax or impost
on or pertaining to sale of energy or capacity shall be payable by GEB over and above
the Tariff.
… …… …… …...
7.4 Incentive The incentive referred to in 7.1 above with respect to any fortnight
shall be in the form of additional return on equity at the rate of 0.575% for every 1%
G increase in the generation above the normative level of 6000 hours per kWH/KW(i.e
68.5% PLF) in accordance with the amendment dated 17.1.94 to the said notification
No.SO 251(E).”
6
(2000) 3 SCC 379, where it was held pertinently that:
“Section 43 empowers Electricity Board to enter into arrangement for purchase
of electricity on such terms as may be agreed. Section 43-A(1) provides that a generating
company may enter into a contract for the sale of electricity generated by it with Electricity
H
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 613
[S. RAVINDRA BHAT, J.]

agree to terms as they deem appropriate, for generation and sale of A
electricity under Section 43A except that the tariff is to be in accordance
with the provision contained in Section 43A. The decision in Binani
Zinc Ltd. v. Kerala State Electricity Board7; Tata Power Company
Ltd. vs. Adani Electricity Mumbai Ltd. and Ors.8 too have taken a
similar approach.
B
24. Clause 6.5 of the PPA of 03.02.1994 dealt with a situation
concerning change of law. It also stated that any amendment in the
Central Government’s notification dated 30.03.1992 would be taken into
account for tariff calculation.9 The relevant part of the notification of
Board. As regards the determination of tariff for the sale of electricity by a generating C
company to the Board, Section 43(1)(2) provides that the tariff shall be determined in
accordance with the norms regarding operation and plant load factor as may be laid
down by the authority and in accordance with the rates of depreciation and reasonable
return and such other factors as may be determined from time to time by the Central
Government by a notification in the official gazette. These provision clearly indicate that
the agreement can be on such terms as may be agreed by the parties except that the tariff
is to be determined in accordance with the provision contained in Section 43-A(2)and D
notifications issued thereunder. Merely because a contract is entered into in exercise of
an enacting power conferred by a statute that by itself cannot render the contract a
statutory contract. If entering into a contract containing prescribed terms and conditions
is a must under the statute than that contract becomes a statutory contract. If a contract
incorporate certain terms and conditions in it which are statutory then the said contract
to that extent is statutory. A contract may contain certain other terms and conditions
which may not be of a statutory character and which have been incorporated therein as E
a result of a mutual agreement between the parties. Therefore, the PPAs can be regarded
as statutory only to the extent that they contain provisions regarding determination of
tariff and other statutory requirements of Section 43A(2).”
7
(2009) 11 SCC 244
8
2019(7) SCALE 297
9
The stipulation reads as follows:
“6.5 Change in Law: In the event that as a result of any laws or regulations
F
of any Governmental Authority or any national ,regional or municipal authority thereof
coming into effect after the date hereof, and in force at the date hereof being amended,
modified or repealed, the interest of GTEC in the Project and/or GTEC’s projected
economic return net of tax (or other imposition) on its investment in the Project is
materially reduced prejudiced or otherwise adversely affected (including without
limitation, any restriction on the ability to convert Rupees or remit funds in foreign G
currencies outside of India) then the parties hereto shall meet and endeavour to agree
on amendments to this Agreement to the effect that all of the increased cost or lost return
on investment incurred by GTEC that would result from complying with or being
subject to any such change in law shall be passed through to GEB under GTEC Tariff.
Any amendment in Government of India Notification No.S.O.251(E)dated 30.3.92 shall
be taken into account for Tariff calculation.”
H
614 SUPREME COURT REPORTS [2020] 6 S.C.R.

A 30.03.1992 which dealt with charges recoverable by the generating
company was clause 1.6.10 That condition was amended by the notification
dated 06.11.1995 which clearly stated, by Note(2) that:
“Note:2-For Naptha based thermal plants, the extent of
backing down, as ordered by Regional Electricity Boards,
B beyond plant Load Factor of 6000 kwh/kw/year, shall not be
reckoned as generation achieved for incentive purpose.”
25. There is no dispute that the PPA which the parties entered
into specifically referred to the notification of 30.03.1992 and further
went on to state that for the first Kwh/KW, a plant load factor of 68.5%
C fixed charges and variable charges were deployed. For generation
achieved over and above this by the concerned unit – CLP, an incentive
@ 5.75% for every 1% increase over and above the fixed and variable
charge payable was agreed to. Significantly, the fixed and variable charges
are in consonance with the statutory notification of 30.03.1992 (which
was also later amended on 17.01.1994). This much is clear from a plain
D reading of clause 7.1 of the Schedule VII to the PPA itself. In view of
the fact that the notification amended on 06.11.1995 was a statutory
one, there cannot be any doubt that it was binding upon the parties.
Therefore, the earlier notification which left it free to the parties to
negotiate on various aspects, including on the incentive payable, stood
E amended by Note 2, which was added to clause 1.6 of the tariff. The
effect of this statutory incorporation by way of amendment was that
incentive no longer became payable. The arguments by the CLP, in the
opinion of the Court, that the parties were bound only by the terms of the
agreement and that the amendment notification being prospective, could
not have altered the terms of the tariff, especially the incentive payable,
F are insubstantial and have no force. The concurrent findings on this
aspect, therefore, are sound and do not call for interference. Likewise,
10
‘The said condition in the notification is as follows:
“1.6 Full fixed charges shall be recoverable at generation level of 5500-6000
hours/KW/year: Payment of fixed charges below the level of 5500 KWh/KW/year shall
G be on pro-rata basis. There shall not be any payment of fixed charges for generation
levels above 6000 hours./KW/year: However generation above 6000 hours./KW/Year
shall be at negotiated rates between the Generating companies and the Board, which
shall not include fixed cost element. While computing the level of generation, the extent
of backing down, as ordered by the Regional Electricity Board shall be reckoned as
generation achieved. The payment of fixed charges shall be on monthly basis,
proportionate to the electricity drawn by the respective Boards. Necessary adjustment
H based on actual sales and deemed sales shall be made at the end of each year:”
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 615
[S. RAVINDRA BHAT, J.]

the change of law provision (Clause 6.5 of the PPA) clearly contemplated A
that any amendment to the prevailing tariff notification (dated 30.03.1992)
would bind the parties. Since Note (2) was an amendment, which dealt
with the issue of incentive, it cannot now be said that it was inapplicable.
The findings of the lower authorities, therefore, are correct; no
interference is called for.
B
26. The next question is whether the GERC and APTEL fell into
error in granting restricted refund calculable for the 3 year period prior
to Gujarat Urja’s application. The concurred findings on this aspect, in
the opinion of this court, are reasonable. There is merit in CPL’s
submission that the earliest point in time, when the cause of action arose,
was in May,1996, when Gujarat Urja rejected its contention that incentive C
was payable in terms of the PPA, notwithstanding the notification of
06.11.1995. Despite this stated position, meetings continued to be held
and, what is more, incentive amounts, were paid to CLP. No doubt, no
document conclusively stated that CLP’s claim was accepted. We do
not find any merit in the submission of Gujarat Urja that the issue was D
kept alive, due to a series of communications. In this regard, APTEL’s
findings about inapplicability of Section 18 of the Limitation Act, are
correct. There was no admission on the part of CLP, at least of the kind,
that extended the time for preferring an application for recovery of excess
payments. It has been consistently ruled by this court that repeated letters,
or exchange of communications, do not extend the period of limitation, E
provided by law.11
27. The third, and last issue, is with respect to payment of interest
on deemed equity. Clause 1.5 of the 30.03.1992 notification provided for
interest on loan, as a component of tariff; it stipulated that interest (on
outstanding loan) shall be computed as per financial package approved F
by the Authority (CEA). The PPA of 03.02.1994 (Schedule VII) clause
7.5.10 defined interest on loan capital as the sum of all payments of
interest along with bank charges and all associated financing costs
paid to the bank annually on the outstanding loans paid by
GTEC.…” The Central Commission’s order of 21.02.2000 led to a G
stipulation in the tariff regulations of 2001. Eventually, the Tariff
Regulations of 2004 was brought into force; it provided for a debt ratio
of 70:30 for determination of tariff. It also provided that:
11
S.S.Rathore v State of Madhya Pradesh 1989 (4) SCC 582; Union of India v Har
Dayal 2010 (1) SCC 394; Schlumberger Asia Services Ltd vs. Oil and Natural Gas
Corporation Ltd. 2013 (7) SCC 562. H
616 SUPREME COURT REPORTS [2020] 6 S.C.R.

A “Where equity employed is more than 30%, the amount of
equity for determination of tariff shall be limited to 30% and
the balance amount shall be considered as the normative loan”
28. The debt-equity ratio in this case, was disturbed; accordingly
` 53.9 crores was treated as “deemed” or normative loan, for which the
B parties had to agree the rate of interest payable, in accordance with the
tariff notification. It was in the light of these developments that the
supplementary agreement was entered into. That amended the existing
PPA, to the following effect12:
“The parties have agreed to recognize an amount of Rs.53.90
C crores as “Own Capital” deployed to meet with the Capital
Cost and allowance of Payment of cost in the form of “Cost
of Own Capital”@ the rate of 14% per annum effective from
1.7.2003 and up to 31.12.2009. No payment of any nature
will accrue after the said date on the said amount.”
D 29. It is thus apparent, that the parties did not harbor any doubt
about the period for which the specified interest was payable on such
deemed loan. The rate of interest was fixed; likewise, the date from
which payment obligations were to arise, too were known. Also, the
date upto which the interest on such deemed loan payments were to be
made, was known and fixed. In these circumstances, CLP’s claim that
E the payment of interest for a prior period was outstanding, and constituted
Gujarat Urja’s liability, is insubstantial. In a recent judgment13 a similar
issue had arisen. The court quoted from the decision in National Thermal
Power Corporation Ltd. v. Madhya Pradesh State Electricity Board14
where another previous decision was cited with approval on the issue
F that the express provision for something, in an agreement, meant that
other similar matters stood excluded.15
12
f.n.1 ibid.
13
Uttar Haryana Bijli Vitran Nigam Ltd.and Ors. vs. Adani Power Ltd. and Ors. 2019
(5) SCC 325
14
(2011)15 SCC 580
G 15
The relevant portions of this court’s observations, in Uttar Haryana (f.n.13 ibid) are
as under.:
“25. In this connection, it is material to note that the claim in South Eastern
Coalfields (2003) 8 SCC 6487 was essentially covered Under Section 61 of the Sale of
Goods Act,1930, and the interest by way of damages was payable as per this statutory
provision itself. The liability had been crystallised and the interest had become payable
because of the failure to pay the amount as per the liability. Besides, there was nothing
H
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 617
[S. RAVINDRA BHAT, J.]

30. A somewhat analogous issue, i.e. interest on normative deemed A
loan (i.e. deemed loan), in the context of changed debt-equity ratios,
under tariff regimes was considered in a decision of this court16, where
it was held that:
“20. In the order of the Appellate Tribunal dated 23.11.2007
the matter came to be dealt with under the heading ‘debt equity B
ratio’.The Tribunal went on to accept the case of the Appellant
in respect of all old projects of DVC and normative debt equity
of 50:50 was assigned, commissioned prior to 1992. In respect
of recent projects such as Mejina, it was assigned debt equity
ratio of 70:30 on capital structure as specified in the
Regulations. This finding has become final. It was contended C
on behalf of the Appellant that equity has been the primary
source of capital. Thereafter,in paragraph A-10, it was found
by the Appellate Tribunal that owners take upon themselves
business related risk and are entitled to interest on capital
investment,but the return is to be governed by the scheme of D
determination of tariff for the supply of electricity as mandated
by the law in place. The Appellate Tribunal further proceeds
to hold that the scheme provides for assured Return on Equity
(ROE) which is at the rate of 14% on the equity employed for
the purpose of supplying electricity. The scheme does not
permit return on investment made on projects other than for E
supply of electricity to be recovered from supply of electricity.
The Tribunal went on to hold that the DVC Act does not
recognise capital as borrowings and there is no reference
about repayment of such capital to the participating
Governments. The Appellate Tribunal proceeds to hold that
the capital infused by participating Governments is in the F
nature of equity capital and for the determination of tariff,
in the agreement between the parties to the contrary on the issue of grant of interest. In
the present matter, we have the second proviso to Regulation 79(2) of the 1999
Regulations which permitted the generating company to continue to charge the existing
tariff for such period as may be specified in the notification by the Commission, and the
G
notifications permitted continuation of the existing tariff as on 31-3-2001, until the final
tariff was determined. There was no provision for payment of interest therein. The very
fact that interest came to be provided subsequently by a notification under the Regulations
of 2004 is also indicative of a contrary situation in the present matter viz. that interest
was not payable earlier.”
16
Damodar Valley Corporation vs. Central Electricity Regulatory Commission & Ors.
2018 (15) SCALE 451. H
618 SUPREME COURT REPORTS [2020] 6 S.C.R.

A the same would be eligible for return on equity but the
Appellate Tribunal does not end there. It clearly provides that
the return on equity is as may be permitted by the tariff
Regulation of 2004. It is thereafter that the Appellate Tribunal
in para 15 proceeded to hold that the DVC Act provides for
interest on capital which is contributed by the participating
B Governments. The accrued interest due to the Governments
apparently has been allowed to be retained by the Appellant.
The same however came to be ploughed back into the capital
with the tacit consent of the participating Governments.
Thereafter, it is stated that this has to be provided to the DVC
C as per the provisions of Section 38 of the DVC Act. It is
thereafter paragraph A-16 which we have already extracted,
the Tribunal proceeded to observe that under the DVC Act if
there is any deficit in the capital contributed by the
participating Governments,it is to be made good by taking
loan on behalf of the participating Governments. The said
D debt would attract interest. The average interest rate of the
repayment payable is to be applied on a 50:50 normative debt
capital. This means that out of the aggregate equity including
reserves, equity considering the normative debt ratio of 50:50
would be eligible for return on equity as specified in the
Regulations and the excess of equity,if any, over the equity
E
earning ratio of 14% is to be considered as interest bearing
debt. In the example which has been given it is shown that if
the debt equity ratio is 40:60, return on equity at 14% will be
available on 50% equity whereas interest would be available
at 10% portion of equity and 40% loan which were reduced
F by repayments.
21. On the basis of the remand, the Commission has worked
out the debt equity ratio as directed by the Appellate Tribunal.
It has further provided return on equity at the rate of 14% on
the equity portion, namely 50%. In respect of the debt portion,
G interest has been calculated no doubt after deducting
depreciation, the legality of which is the subject matter of the
other contention which we will deal with separately. It is quite
clear to us that Appellant has already been given return on
equity in terms of the tariff Regulation in respect of capital
on the basis of debt equity ratio which has been fixed by the
H Appellate Tribunal on a ratio which has become final between
the parties.
CLP INDIA PVT LTD v. GUJARAT URJA VIKAS NIGAM LTD. 619
[S. RAVINDRA BHAT, J.]

22. Though a perusal of para A-9 of order dated 23.11.2007 A
may appear to show that equity has been found to be the
main source of capital, a perusal of paragraph A-10,A-16
and more importantly E-13 would show that capital Under
Section 38 of the DVC Act has been understood as the value
of the operating assets when they were first put to commercial
use. Capital is also understood not as equity alone but it has B
been understood both as loan and equity. The ratio between
loan and equity is also fixed in respect of the old projects at
50:50 and under the new projects it is at 70:30.It is further
clear from paragraph E-13 of the order of the Appellate
Tribunal dated 23.11.2007 that the appellate Tribunal C
contemplated that the equity component would remain static
and it would earn the rate of return as provided in the tariff
Regulation. As far as the loan component is concerned, it
would get reduced on account of repayments. Therefore, the
recovery as contemplated under the Regulations was found
to be in two forms, namely, either as return on equity in respect D
of the equity portion and as interest on the loan component.”
31. In the present case, the clear agreement between the parties
was that interest on the sum of ` 53.90 crores was payable for the
specified period 01.07.2003 to 31.12.2009.Therefore, CLP’s claim that
any amount was payable, for any period prior to 01.07.2003, was not E
tenable. Had CLP wished so, nothing prevented it to claim for it during
negotiations and have it included as a term of the contract. Once having
settled for a specified sum, on an amount (` 53.90 crores) that was only
fictionally a loan - and treated as such, for purpose of fixing interest
payable, considering the equity infused, in excess of the tariff regulations,
the absence of any like item, such as interest for prior period, precludes F
a claim. But it was really part of the equity component. Therefore, interest
was per se not payable, but could be paid in terms of the tariff notification
or the agreement. No claim on any other legal or equitable considerations
could have been made. The findings of the lower authorities are therefore,
sound and reasonable. G
32. In view of the foregoing analysis and conclusions, both appeals
have to fail. They are accordingly dismissed, without order on costs.

Ankit Gyan Appeals dismissed.
H