Haryana Power Purchase Centre. vs P.T.C. India Ltd. And Another
2010 Latest Caselaw 3781 Del

*                IN THE HIGH COURT OF DELHI AT NEW DELHI

+                            FAO(OS) No.157/2010
%
                         Date of Decision: 13.08.2010

Haryana Power Purchase Centre.                 Appellant/applicant
                  Through Mr. Parag Tripathi Sr. Advocate with
                            Raghav Gupta, Advocate for the
                            Appellant.

                                      Versus

P.T.C. India Ltd. and Another                         .... Respondents
                     Through Mr.Ashish Bernard & Mr.Varun Pathak,
                              Advocates for respondent No.1.

                                 Mr.Shanti Bhushan, Sr.Advocate with
                                 Mr.Vishal   Gupta,   Advocate   for
                                 respondent No.2.

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR
HON'BLE MR. JUSTICE MOOL CHAND GARG

1.     Whether reporters of Local papers may be               YES
       allowed to see the judgment?
2.     To be referred to the reporter or not?                 NO
3.     Whether the judgment should be reported in             NO
       the Digest?



ANIL KUMAR, J.

*

1. The appellant/applicant, Haryana Power Purchase Centre

(hereinafter referred to as the 'HPPC) has filed this appeal under Section

37 (1) (a) of the Arbitration and Conciliation Act, 1966 seeking inter-alia

to set aside the order dated 19th February, 2010 passed in OMP No.25

of 2010 filed by the P.T.C. India Ltd. against the Jaypee Karcham Hydro

Corporation Ltd. (hereinafter referred to as 'the JKHCL) under Section 9

of the Arbitration and Conciliation Act, 1966. The appellant/applicant

has also sought a direction to PTC India Ltd., respondent No.1 and

JKHCL, respondent No.2 to approach Central Electricity Regulatory

Commission (hereinafter referred to as 'CERC') and to make an interim

arrangement for three weeks for continuation of order dated 29th

January, 2010 passed by the Division Bench in FAO (OS) No.73 of 2010

whereby Single Judge was directed to dispose off the matter

expeditiously and the counsel for JKHCL had stated that the said

company shall not enter into any agreement with any other party for

the sale of power, so as to allow the HPPC to approach the CERC and

to obtain the order under Section 94 (2) of the Electricity Act, 2003.

2. By order dated 19th February, 2010, the application filed by the

PTC India Ltd. under Section 9 of the Arbitration and Conciliation Act,

1966, seeking stay of termination of PPA (Power Purchase Agreement)

by JKHCL and directions against the JKHCL from entering into any

agreement for sale of power with any other party, was dismissed by the

learned Single Judge by the said order.

3. In the said petition under Section 9 of the Arbitration and

Conciliation Act, 1966 being OMP No.25 of 2010, titled as 'PTC India

Ltd. v. JKHCL', an application for impleadment of the

appellant/applicant, HPPC under Order I Rule 10 (2) read with Section

151 of the Code of Civil Procedure dated 19th February, 2010 was also

filed. In the application, the appellant/applicant contended that it had

entered into a power sale agreement dated 25th September, 2006 for the

purpose of 200 MW of power from PTC India Ltd. in which power was to

be procured by the PTC India Ltd. under the Power Purchase Agreement

dated 25th March, 2006 from JKHCL.

4. The allegation of the appellant/applicant was that the Power Sale

Agreement (PSA) was executed for procurement of power on continuous

basis for 35 years from the commercial operation date (COD) of the

Hydro Electricity Power Project developed by the JKHCL in the State of

Himachal Pradesh. The plea of the appellant/applicant is that the tariff

payable by the appellant/applicant to PTC India Ltd. had to be

determined by the said Central Electricity Regulatory Commission in

accordance with its Regulations and reliance was placed on Clause

9.1.2 of Power Sale Agreement.

5. The appellant/applicant further asserted that JKHCL suffered

cost escalation and approached CERC for its approval and filed a

petition bearing No.153 of 2009 seeking grant of approval for the

revised capital cost of Rs.7080.38/- crores and to declare and confirm

that the CERC shall consider the final cost and/or tariff for the project.

According to the appellant/applicant by order dated 26th October, 2009,

the CERC had adjudicated the prayer for approval of revised capital cost

and did not consider final capital cost and/ or tariff for the project. It

was also pleaded that under Regulation 5 of the CERC (terms and

condition of tariff) Regulation, 2009 JKHCL was to approach six months

before the commercial operation date. According to the

appellant/applicant ultimate beneficiary of power generated from the

project is the appellant/applicant as PTC India Ltd. is only entitled to

recover and retain its trading margin for the supply of power for the

project, and in case PPA and PSA are terminated and parties are

directed only to pay damages, it will not be an adequate relief to the

appellant/applicant, and if cost of procuring power would be more, the

appellant/applicant shall be forced to pass it on to the consumer which

will be against the public interest. In the circumstances, it was asserted

that the Court is not the appropriate forum for adjudication of disputes

between the PTC India Ltd. and JKHCL, and Electricity Act, 2003 is a

comprehensive Act with respect to all the matters pertaining to

electricity which should be determined by the CERC.

6. The appellant/applicant also contended that in the

circumstances, under Section 79 (1)(f) of the Electricity Act, 2003 the

CERC has the statutory responsibility to adjudicate upon the disputes

involving generating company with regard to the matters connected with

Clause 'a' to 'd' of Section 79 (1). The appellant/applicant also

contended that in terms of Section 94 (2) of the Electricity Act, 2003,

the CERC also has the power to grant interim relief and on these

allegations, the appellant/applicant sought to be impleaded as party to

OMP No.25/2010, the petition filed by the PTC India Ltd. under Section

9 of the Arbitration and Conciliation Act, 1966 against JKHCL to seek

the declaration that the said petition under section 9 of the Arbitration

and Conciliation Act, 1996 filed by the PTC India Ltd. was not

maintainable and for direction to PTC India Ltd. to approach the CERC

for adjudication of his disputes with JKHCL.

7. The grievance of the appellant/applicant is that though on 19th

February, 2010, application for impleadment was filed by the

Appellant/applicant in OMP No.25 of 2010, and the fact about filing of

the application for impleadment was mentioned before the Learned

Single Judge, however, he has not taken into consideration the

submissions made on behalf of the appellant/applicant. According to

the appellant/applicant even if the application for impleadment of the

appellant/applicant was not on record, while dismissing OMP

No.25/2010, the petition of the PTC India under section 9 of the

Arbitration and Conciliation Act, 1996, the learned Single Judge should

have considered the pleas and contentions raised by the

appellant/applicant.

8. Mr. Tripathi, learned senior counsel for the Appellant has also

pointed out by referring to para 18 of the appeal stipulating that the

application for impleadment filed by the appellant was withdrawn by

the appellant on 24.2.2010 as the main petition being OMP No.25/2010

under section 9 of the Arbitration and Conciliation Act, 1996 had been

disposed of by the Single Judge by order dated 19th February, 2010. Mr.

Tripathi, senior Advocate has further contended that despite withdrawal

of application of the appellant for impleadment to the proceedings

under section 9 of the Arbitration and Conciliation Act, 1996 on

account of non consideration of pleas and contentions of the

applicant/appellant, the decision of the Single Judge dated 19th

February, 2010 has been impacted and in the circumstances the

present appeal shall be maintainable.

9. The learned senior counsel has relied on (1983) 3 SCC 75, M/s

M.Ramnarain Private Limited Vs State Trading Corporation of India Ltd;

(2002) 10 SCC 668, V.D.Barot Vs State of Gujarat and Ors. (1998) 6

SCC 507, P.R.Despande Vs Maruti Balaram Haibatti and (2000) 5 SCC

44, Jagdish Lal Vs Parma Nand in support of his contention that

though the application for impeachment was withdrawn by the

appellant before the learned single judge and no order had been passed

on the pleas and contentions of the appellant, yet the appeal against the

impugned order passed in the petition of respondent no.1 is

maintainable.

10. In Jagdish Lal (supra) the tenant had given an undertaking before

the High Court to vacate the premises and thereafter, had approached

the Supreme Court. It was held that the right of the tenant to approach

Supreme Court under Article 136 of the Constitution of India is not

curtailed because of undertaking given to the lower Court. It was

further held that the Supreme Court could examine the circumstances

under which the undertaking was given and decide whether the

tenant's special leave petition misled the Court or deceived the other

party. The Supreme Court had however, left the question moot where

the tenant himself requested to the Court to vacate the premises and

gave the undertaking and thereafter approached the Supreme Court.

Apparently the case of the appellant is quite distinguishable as the

application for impleadment was withdrawn by the appellant on his

own.

11. In P.R.Deshpande (supra) it was held that the appeal by a tenant

against an order of eviction would be maintainable notwithstanding any

undertaking given by him before High Court that he would vacate the

premises within specified time. In V.D.Barot (supra) a writ petition was

withdrawn by a petitioner in order to file a representation to the

authorities and after representation was rejected, a fresh writ petition

was filed which was held to be maintainable despite petitioner not

withdrawing the earlier writ petition with liberty to file the writ petition

after adjudication of his representation. In M/s M.Ramnarain Pvt. Ltd.

(supra) an appeal which was not competent was withdrawn and

subsequently another appeal was filed incorporating grounds which

were taken in earlier appeal. The Supreme Court had held that such an

appeal was maintainable.

12. The ratio of all these cases relied on by the appellant are different

and distinguishable and does not support the plea of the appellant that

after withdrawing his application for impleadment before the Single

Judge, he can challenge the order passed by the learned Judge in the

main petition in which impleadment was sought by the appellant. It is

no more res integra that the ratio of any decision must be understood in

the background of the facts of that case. What is of the essence in a

decision is its ratio and not every observation found therein nor what

logically follows from the various observations made in it. It must be

remembered that a decision is only an authority for what it actually

decides. It is well settled that a little difference in facts or additional

facts may make a lot of difference in the precedential value of a

decision. The ratio of one case cannot be mechanically applied to

another case without having regard to the fact situation and

circumstances in two cases.

13. On 19th February, 2010 when the Single Judge decided the

petition of the respondent no.1 under section 9 of the Arbitration and

Conciliation Act, 1996 pursuant to the order of the Division Bench in

FAO (OS) 73 of 2010 dated 29th January, 2010 to decide the petition

expeditiously, though the application for impleadment was filed by the

appellant, however, it was neither listed nor could be termed to be

pending, so as to take the same into consideration by the Single Judge.

14. Whether the appellant was a necessary party to be impleaded in a

petition under Section 9 of the Arbitration & Conciliation Act, 1996 has

not been adjudicated by the Single Judge. Without impleadment of the

appellant, whether the appellate Court should interfere with the

discretionary interim order passed by the Single Judge. In the peculiar

facts and circumstances of this case it would not be appropriate to take

up the pleas and contention of the appellant in order to determine the

validity of the order of the learned Single Judge dated 19th February,

2010.

15. This also cannot be disputed that the appellate Court is not to

interfere with the exercise of discretion of the Court of first instance and

substitute its own discretion except where the discretion has been

shown to have been exercised arbitrarily or capriciously or perversely or

where the Court has ignored the settled principles of law regulating

grant or refusal of interim orders. An appeal against exercise of

discretion is appeal on principle and the appellate Court is not to

reassess the material and to reach a conclusion different from the one

reached by the Court below if the one reached by that Court was

reasonably possible on the material. The appellant could contest the

grant or decline of interim order by respondent No.1 against respondent

No.2 after being impleaded as a party to the petition. The appellant for

the reasons known to him opted to withdraw the application for

impleadment and consequently the pleas and contentions of the

appellant remained undetermined by the Learned Single Judge.

16. After withdrawing the application for impleadment to the petition

under Section 9 of the Arbitration & Conciliation Act, 1996 filed by

respondent No.1, if the appellant was of the view that he was a

necessary party and should have been heard and its pleas considered

by the Single Judge, the appellant could have filed another application

for impleadment and could have sought review of order dated 19th

February, 2010 passed by the learned Single Judge in OMP No.25/2010

the petition of respondent No.1 under Section 9 of Arbitration &

Conciliation Act, 1996 or could have initiated any other proceedings

deemed appropriate. This observation by this Court, however, does not

adjudicate that after withdrawing the application for impleadment

without seeking leave of the Court to file a fresh application, whether

such a subsequent application would be maintainable or not.

17. In the circumstances the facts which have emerged are that the

application for impleadment was withdrawn by the appellant and the

appellant was not impleaded by the learned Single Judge. The pleas and

contentions raised by the appellant in respect of the order under

Section 9 of the Arbitration & Conciliation Act, 1996 dated 19th

February, 2010 have not been considered and adjudicated by the

learned Single Judge. In the circumstances, whether this appellate

Court should consider the pleas and contentions of the appellant and

interfere with the impugned order dated 19th February, 2010 which is a

discretionary order passed by the Single Judge, is to be determined by

this Court.

18. If the jurisdiction of the appellate Court is restricted and the

appellate Court is not to interfere with the exercise of discretion of the

Court of first instance and substitute its own discretion except where

the discretion is exercised arbitrarily or capriciously or perversely or in

ignorance of settled principles of law, it will not be appropriate for the

appellate Court to exercise jurisdiction in favour of the appellant whose

pleas and contentions were not considered because the

appellant/applicant had opted to withdraw his application for

impleadment and consequently even the pleas and contentions raised

by the appellant could not be considered by the learned Single Judge.

19. In the totality of facts and circumstances and taking into

consideration all the facts, it would not be appropriate for the appellate

Court to exercise its appellate jurisdiction against the order dated 19th

February, 2010 passed by the learned Single Judge in a petition under

Section 9 of the Arbitration & Conciliation Act, 1996 by respondent

No.1 against respondent No.2 on the basis of pleas and contentions of

the appellant. Consequently the appeal of the appellant cannot be

entertained and is rejected.

20. The learned counsel for the appellant has also placed reliance on

(2008) 4 SCC 755, Gujarat Urja Vikas Nigam Ltd v. S.R.Power Ltd

holding that conduct of arbitration under Section 86(1) (f) of Electricity

Act, 2003 would be governed by the provisions of the Arbitration &

Conciliation Act, 1996 to the extent there is no conflict with any

provisions of Electricity Act and in case of conflict the Electricity Act

would prevail. The learned counsel for the appellant has contended that

while considering the order of the Single Judge dated 19th February,

2010 passed on a petition under Section 9 of the Arbitration &

Conciliation Act, 1996 filed by respondent No.1 against respondent

No.2, the ratio laid down by the Supreme Court in Gujarat Urja Vikas

Nigam Ltd (Supra) be considered. The learned counsel has also placed

reliance on Order 1 Rule 8A of Code of Civil Procedure authorizing

Court to permit a person or body of persons to take opinion or to allow

persons to take part in the proceedings. In the circumstances, it is

contended that since the appellant is also an interested person in

questions of law and pleas and contentions raised by respondent No.1

and respondent No.2, therefore, the said precedent be considered by

this Court while adjudicating the challenge to the order dated 19th

February, 2010 of the learned Single Judge.

21. This has not been disputed by the learned counsel for the

appellant, Mr.Prag Tripathi, Senior Advocate that the said precedent is

referred to by both the parties, respondent No.1 and respondent No.2 in

the appeal being FAO (OS) No.146/2010 titled PTC India Ltd v. Jaypee

Karcham Hydro Corporation Ltd as the said appeal was listed along

with the present appeal and was argued by respective counsel for

respondent No.1 & 2. Therefore, the said precedent, Gujarat Urja Vikas

Nigam Ltd shall be considered by the Court in the appeal filed by PTC

India Ltd against J.P.K.H.C.L against the order dated 19th February,

2010. In the circumstances the appellant is not to be given any further

permission under Order 1 Rule 8A of Code of Civil Procedure to take

part in the proceedings as the appeal No.FAO (OS) No.146/2010 had

been heard before the present appeal.

With these observations the present appeal is disposed of.

ANIL KUMAR, J.

August 13, 2010                       MOOL CHAND GARG, J.
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