POWER GRID CORPORATION OF INDIA LTD.versusPUNJAB STATE POWER CORPORATION LTD. AND OTHERS

                            [2016] 2 S.C.R. 116


A           POWER GRID CORPORATION OF INDIA LTD.
                                     v.
     PUNJAB STATE POWER CORPORATION LTD. AND OTHERS
                       (Civil Appeal No. 9193 of2012)
                               MARCH 03, 2016
B
           [RANJAN GOGOi AND PRAFULLA C. PANT, JJ.]
           Central Electricity Regulatory Commission (Terms and
    Conditions of Tariff) Regulation, 2009: Regns. 2, 3(12) -
    Transmission Tariff - Determination of - Date of Commercial
    operation - Appellant is transmission licencee - Constructed ./00
c   KV Barh-Balia double circuit transmission - Respondent no. I is
    one of the beneficiaries - Construction of sub-station including
    switchgear and protection system at the Barh end was within the
    scope of work undertaken by NTPC - Appel/am filed petition before
    CERC for determination of Transmission Tariff for the period
D   I. 7.20IO to 3I.3.201./ - Petition \\'OS heard and till that date
    respondent no. I had not raised any objection - Matter was reserved
    for judgment - Thereafter respondent no. I filed an affidavit stating
    that the line was not operational - CERC decided the tariff w.ej
    I. 7.2010 payable by beneficiaries - Appeal by respondent no. I -
    Tribunal remanded the matter accepting the plea of respondent no. l
E   that since condition of trial operation and regulatory services were
    not fulfilled as such Commission erred in declaring tariff - On
    appeals, held: Switchgear and other works are part of transmission
    lines by virtue of its definition in s.2(72) - Switchgear at Barh end
    of Barh-Balia line for protection and metering were to be installed
F   by NTPC and the same was not done by it when transmission line
    was completed by the appellant - As such the appellant might have
    suffered due to delay on the part of NTPC in completing the
    transmission lines for some period - But beneficiaries, including
    respondent No. 1, cannot be made liable to pay for this delay w.ej
    OI.07.2010 as the energy supply line had not started on said date
G   and. beneficiaries could not be made liable to pay the tariff before
    transmission line was operational.
          Dismissing the appeals, the Court
           HELD: COD of transmission lines can he achieved only on
    fulfillment of following three conditions: The line has been charged
H
                                     116
  POWER GRID CORPORATION OF INDIA LTD. v. PUNJAB                      117
         STATE POWER CORPORATION LTD.

successfully, its trial operation has been successfully carried out, A
and it is in regular service. Switchgear and other works are part
of transmission lines. Regulation 3(12) of the Regulations, 2009
cannot he interpreted against the spirit of the definition of
"transmission lines" given in the statute. It is not a disputed
fact that switchgear at Barh end of Barh-Balia line for protection
                                                                        B
and metering were to he installed by NTPC and the same was
not done by it when transmission line was completed by the
appellant. As such the appellant might have suffered due to delay
on the part of NTPC in completing the transmission lines for
some period. But beneficiaries, including respondent no.I,
cannot be made liable to pay for this delay w.e.f. 01.07.2010 as C
the energy supply line had not started on said date. Meanwhile
during the pendency of these appeals, in compliance of the interim
order, after hearing all the concerned parties, C.E.R.C. has
decided the matter on 30-06-2015, and transmission line has been
 now declared successfully charged w.e.f. 01-09-2011 and the D
commercial operation has started on said date. However, the
 M·der dated 30-06-2015 passed by C.E.R.C. is stated to be
 operative subject to decision of this Court in the present appeals,
 due to the interim order passed by this court. Respondent No. 1
 and _the beneficiaries cou.Jd not have been made liable to pay the
 tariff before transmission line was operational, there is no infirmity E
 in the impugned order. [Paras 7, 11, 12, 13) [120-H; 121-A-B, G-
 B; 122-A-D)
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9193
of2012
      From the Judgment and Order dated 02.07.2012 of the Appellate    F
Tribunal for Electricity, New Delhi in Appeal No. 123 of2011
                               WITH
      C.A. NO. 9302 OF 2012
      C. A. Sundaram; Sr. Adv., M. G. Ramachandran, Pramod Dayal,      G
Nikunj Dayal, Ms. Paya! Dayal, Ms. Swana Shcshadri,Anand Ganesan,
Advs. with him fortheAppellant.
      Subromonium Prasad, Sr. Adv., Abhay Kumar, Tenzing, Ashmit
Singh, Pradeep Misra, Vishal Anand, Pukhrambam Ramesh Kumar, Sum it
Kumar Vats, Advs., with him for the Respondents.                       H
118             SUPREME COURT REPORTS                          (2016] 2 S.C.R.


A           The Judgment of the Court was delivered by
             PRAFULLA C. PANT, J. I. These appeals preferred under
      section 125 of Electricity Act, 2003 are directed against orders dated
      02.07.2012 and 08.11.2012 respectively, passed by Appellate Tribunal
      for Electricity, New Delhi (for short "the Tribunal"), whereby Appeal
B     No. 123 of201 I was allowed and Review Petition No. 09 of2012 filed
      against that order was dismissed by the Tribunal, and matter was
      remanded back to Central Electricity Reg,ulatory Commission (CERC)
      for redetermination of date of commercial operations (COD) of 400 KV
      Barh-Balia double circuit transmission?

c           2. The issue involved in the present case is as to:-
            Whether the new transmission line charged from one end by the
            transmission licensee without switchgear, protection system and
            metering arrangement (not in the scope of works of the
            transmission licensee) at the other end could not have been
D           commissioned for the purpose of raising transmission charges
            against the beneficiaries in the light of second Proviso to clause
            ( c) of Regulation 2 of Central Electricity Regulatory Commission
            (Terms & Conditions of Tariff) Regulations, 2009 (for short
            "Regulations, 2009")?

 E          3. We have heard Learned Couns>d for the parties and perused
      the papers on record.
            4. Brief facts of the case are that appellant Power Grid Corporation
      of India (for short "Power Grid") is a transmission licensee who
      constructed 400 KV Barh-Balia double circuit transmission. Punjab State
      Power Corporation Ltd. (respondent No. 1) is one of the beneficiaries
 F
      who is a successor-in-interest of Punjab State Electricity Board. Appellant
      had entered into contractual agreement, i.e Bulk Power Transmission
      Agreement with respondent No. I and other beneficiaries for providing
      the service of transmission lines. National Thermal Power Corporation
      (NTPC) was constructing a Super Thermal Power Station at Barh in
 G    the State of Bihar. The construction of the Sub-station including the
      switchgear and protection system at the Barh end was within the scope
      of work undertaken by NTPC. It is pleaded by the appellant that it had
      duly constructed and completed the work assigned to it by 30'" June,
      2010. It is further pleaded that the line was duly charged with all reactors
      and battery chargers in service and auxiliary supply was available and
 H
      the system was running.
 POWER GRID CORPORATION OF INDIA LTD. v. PUNJAB    119
STATE POWER CORPORATION LTD.[PRAFULLA C. PANT, J.]

       5. On 01-10-2010 the appellant filed a petition (No. 267of2010)           A
before CERC for determination of transmission tariff for the period from
01-07-2010 to 31-03-2014. Admittedly the petition was heard by CERC
on 25-01-2011, and till that date respondent No. I had not raised any
objection. The matter was reserved for the Judgment. Thereafter,
respondent No. 1 appears to have filed an affidavit stating that that line
                                                                                 B
was not operational. CERC, vide order dated 29-04-2011 decided the
tariff for Barh-Balia line w.e.f 01-07-2010, payable by beneficiaries.
Aggrieved by said order respondent No. 1 filed the appeal (No. 123 of
2011) before the Tribunal and pleaded that since condition of trial
operation and regulatory services were not fulfilled, as such, the Central
Commission erred in declaring the tariffw.e.f. 01-07-2010. The Tribunal          c
accepted the. plea ofrespondent No. 1, and remanded the matter. Hence,
these appeals. ,_
       6. Before further discussion we think it just and proper to quote
the relevant provision contained in Regulations, 2009 forthe just decision
of the case. Clause ( 12) of Regulation 3 defines 'date of commercial            D
operation' (COD) as under:-
      "(12). 'Date of Commercial Operation' of 'COD' means
       (a)   In relation to a unit or block of the thermal generating station,
             the date declared by the generating company after
             demonstrating the maximum continuous rating (MCR) or                E
             the installed capacity (IC) through a successful trial run
             after notice
       (b)   to the beneficiaries, from 0000 hour of which scheduling
             process as per the Indian Electricity Grid Code (!EGC) is
             fully implemented, and in relation to the generating station        F
             as a whole, the date of commercial operation of the last
             unit or block of the generating station;
       (c)   In relation to a unit of hydro generating station, the date
             declared by the generating company from 0000 hour of
             which, after notice to the beneficiaries, scheduling process        G
             in accordance with the Indian Electricity Grid Code is fully
             implemented, and in relation to the generating station as a
             whole, the date declared by the generating company after
             demonstrating peaking capability corresponding to installed
             capacity of the generating station through a successful trial
             run, after notice to the beneficiaries:                             H
120               SUPREME COURT REPORTS                        [2016] 2 S.C.R.


A                  Note
                   I.     In case the hydro generating station with pondage or
                          storage is not able to demonstrate peaking capability
                          corresponding to the installed capacity for the reasons
                          of insufficient reservoir or pond level, the date of
B                         commercial operation of the last unit of the generating
                          station shall be considered as the date of commercial
                          operation of the generating station as a whole,
                          provided that it will be mandatory for such hydro
                          generating station to demonstrate peaking capability
                          equivalent to installed capacity of the generating unit
c                         or the generating station as and when such reservoir/
                          pond level is achieved.
                   2.     In case of purely run-of-river hydro generating
                          station ifthe unit or the generating station is declared
                          under commercial operation during lean inflows period
D                         when the water is not sufficient for such
                          demonstration, it shall be mandatory for such hydro
                          generating station or unit to demonstrate peaking
                          capability equivalent to installed capacity as and when
                          sufficient inflow is available.
 E          (d)    In relation to the transmission system, the date declared by
                   the transmission licensee from 0000 hour of which an
                   element of the transmission system is in regular service
                   after successful charging and trial operation:
                   Provided that the date shall be the first day of a calendar
 F                 month and transmission charge for the element shall be
                   payable and its availability shall be accounted for, from that
                   date:
                   Provided further that in case an element of the transmission
                   system is ready for regular service but is prevented from
 G                 providing such service for reasons not attributable to the
                   transmission licensee, its suppliers or contractors, the
                   Commission may approve the date of commercial operation
                   prior to the element coming into regular service."
           7. The language in the above definition is clear and unambiguous.
H     We agree with the Tribunal that COD of transmission lines can be
 POWER GRID CORPORATION OF INDIA LTD. v. PUNJAB    121
STATE POWER CORPORATION LTD.[PRAFULLA C. PANT, J.]

achieved only on fulfillment of following three conditions:-                     A
(i)     The line has been charged successfully,
(ii)    lts trial operation has been successfully carried out, and
(iii)   It is in regular service.
      8. It is contended on behalf of the appellant that what has been B
misinterpreted by the Tribunal is the second Proviso of clause (12) of
Regulation 3 which provides that where transmission system is ready
for regulatory services but prevented from providing the service for
reasonS'not attributable to the transmission licensee, the commission has
the power to approve the date of commercial operation prior to element c
coming into regular service. It is not disputed in the present case that
Barh Sub-station was being constructed by NTPC, and Power Grid
cannot be made to suffer as nothing was attributable to it.
       9. On the other hand, on behalf of respondent No. 1 it is argued
that the transmission line cannot be said to have been completed unless          D
switchgear and other connected works are also completed, as provided
in thedefinition of"transmission lines".
        10. We have considered the rival submissions. Sub-section (72)
of Section 2 of Electricity Act, 2003 defines the word "transmission
lines'', which reads as under: -                                                 E
        "2(72) "transmission lines" means all high pressure cables and
        overhead lines (not being an essential part of the distribution system
        of a licensee) transmitting electricity from a generating station to
        another generating station or a sub-station, together with any step-
        up and step-down transformers, switch-gear and other works
                                                                                 F
        necessary to and used for the control of such cables or overhead
        lines, and such buildings or part thereof as may be required to
        accommodate such transformers, switch-gear and other works."
        11. From the above definition, it is clear that switchgear and other
 works are part of transmission lines. In our opinion, Regulation 3 (I 2) of
 the Regulations, 2009 cannot be interpreted against the spirit of the G
 definition of"transmission lines" given in the statute. It is evident from
 record that it is not a disputed fact that switchgear at Barh end of Barh-
 Balia line for protection and metering were to be installed by NTPC and
 the same was not done by it when transmission line was completed by
 the appellant. As such the appellant might have suffered due to delay on H
122              SUPREME COURT REPORTS                        (2016] 2 S.C.R.


A     the part of NTPC in completing the transmission lines for some period.
      But beneficiaries, including respondent No. I, cannot be made liable to
      pay for this delay w.e.f. 01.07.2010 as the energy supply line had not
      started on said date.
             12. We are apprised at the bar that meanwhile during the pendency
B     of these appeals, in compliance of the interim order, after hearing all the
      concerned parties, C.E.R.C. has decided the matter on 30-06-20 I 5, and
      transmission line has been now declared successfully charged w.e.f.
      01-09-2011 and the commercial operation has started on said date.
      However, the order dated 30-06-20 I 5 passed by CERC is stated to be
      operative subject to decision of this Court in the present appeals, due to
c     the interim order passed by this court.
              13. Since we are in agreement with the Tribunal that in the present
      case, respondent No. 1 and the beneficiaries could not have been made
      liable to pay the tariff before transmission line was operational, we find
      no infirmity in the impugned order. Therefore, the appeals are liable to
D     be dismissed. Accordingly, both the appeals are dismissed without
      prejudice to the right of the appellant, if any, available to it under law,
      against NTPC. There shall be no order as to costs.
      Devika Gujral                                             Appeals dismissed.

 E