"( 2026:HHC:2729 ) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA LPA No. 492 of 2024 Reserved on 25.11.2025 Pronounced on: 09.01.2026 Himachal Pradesh Electricity Board Ltd. .....Appellant. Versus Kundan Hydro (Luni) Pvt. Ltd. & another …..Respondents. Coram: The Hon'ble Mr. Justice G.S. Sandhawalia, Chief Justice. The Hon’ble Mr. Justice Jiya Lal Bhardwaj, Judge. Whether approved for reporting? Yes. For the Appellant : Mr. Anand K. Ganesan, Advocate (through V.C.) with Mr. Shivom Vashista and Ms. Shivani Verma, Advocate. For the respondents: Mr. Prithu Garg and Mr. Vaibhav Chauhan, Advocates, for respondent No.1. Mr. Pranay Pratap Singh, Additional Advocate General, for respondent No.2-State. G.S. Sandhawalia, Chief Justice. Challenge by the appellant-Himachal Pradesh State Electricity Board Ltd. (hereinafter referred to as ‘the appellant-Board’) in the instant Letters Patent Appeal, is to the judgment dated 10.09.2024, rendered by the learned Printed from counselvise.com 2 Single Judge in CWP No.7177 of 2024, titled Kundan Hydro (Luni) Private Limited vs. State of Himachal Pradesh through its Addl. Chief Secretary (MPP & Power) & anr., whereby the writ petition filed by the petitioner-Kundan Hydro (Luni) Private Ltd-respondent No.1 herein has been allowed by quashing impugned communication dated 16.07.2024 (Annexure P-13) holding the Power Purchase Agreement (for short the \"PPA\") dated 31.05.2000 executed between appellant-Board and \"SPML” not binding upon it being unenforceable against it. The appellant-Board was directed to execute a \"PPA\" with the writ petitioner-Power Company in respect of the entire Project capacity of 4.50 MW at the \"HPERC Regulations- 2017\" determined tariff applicable as on Scheduled Commercial Operation Date of the Project in accordance with law and complete all codal formalities in furtherance thereof without unnecessary delay. In order to avoid loss of electricity generated at the Project, it was ordered that till the determination of tariff as on the date of commissioning of the Project by the \"HPERC Regulations-2017\" in terms of direction supra, the petitioner-Hydro Company was permitted by the respondents to sell the electricity Printed from counselvise.com 3 generated from its Power Project to third parties after adjusting the free power supply to the respondents in accordance with law. Reasoning of the learned Single Judge: 2. The learned Single Judge had allowed the writ petition primarily on the ground that the \"PPA\" dated 31.05.2000 (Annexure P-14) had been executed between the Board and \"SPML” and therefore was not binding upon the petitioner and could not be enforced. The necessary directions thus came to be issued to execute the \"PPA\" in respect to the entire Project capacity of 4.50 MW at the HPERC (Promotion of Generation from Renewable Energy Sources and Terms & Conditions for Tariff Determination) Regulations, 2017 as on Scheduled Commercial Operation Date. It was further directed that the determination of tariff shall be as on the date of commissioning of the Project by the \"HPERC Regulations-2017\" in terms of direction No.(iii), the petitioner was permitted by the respondents to sell the electricity generated from its Power Project to third parties after adjusting the free power supply to the respondents in accordance with law. Printed from counselvise.com 4 3. Principally, the reasons which weighed with the learned Single Judge were that both the Implementation Agreement (IA) and the \"PPA\" dated 31.05.2000 for the 3.00 MW was an agreement which provided specific terms for execution of separate Agreement for purchase of power generated which was to be done within three months. The petitioner-Company was not a party to the said Agreement and the assignment could only be done as per Article 15.10 by written Agreement and the petitioner was not a successor to be bound by it and therefore have come into the picture only later on 25.09.2004 (Annexure P-3) by virtue of Tripatite Agreement executed by \"SPML” and respondent No.1-State. The separate \"PPA\" was required to be executed which was not done and could not be held to be binding upon the petitioner and the \"PPA\" dated 31.05.2000 was binding upon the petitioner. The respondent No.2-HPSEBL was aware of the legal requirements of the separate Power Purchase Agreement (PPA) with the new entity therefore, the rate of \"PPA\" mentioned 20 years earlier could not be enforced upon the petitioner. Printed from counselvise.com 5 4. Resultantly, it has been held that the writ petition was maintainable, as the action of respondent No.2 who is the present appellant was arbitrary enforcing the third-party Agreement upon the petitioner. Accordingly, reliance was placed upon the judgment of the Apex Court in M.P. Power Management Company Limited, Jabalpur Vs. Sky Power Southeast Solar India Private Limited and Others (2023) 2 SCC 703 to come to the conclusion that the prayer for defence of the alternative remedy under Section 81(6) of the “The Electricity Act, 2003” would not be justified. 5. Resultantly, it has been held that there is an abandonment of the \"PPA\" dated 31.05.2000 and \"SPML” had been permitted to execute the Contract. The petitioner‘s locus standi as such was that a new Supplementary Implementation Agreement (SIA) was executed by the petitioner and respondent No.1-State on 06.07.2024 (Annexure P-7), whereby the rights had been transferred of the original Implementation Agreement (IA) dated 31.05.2000 and the Supplementary Implementation Agreement (SIA) dated 01.03.2008 (Annexure P-5) and Printed from counselvise.com 6 there was nothing mentioned in the said Agreement which bound the petitioner with the \"PPA\" dated 31.05.2000. 6. The new Electricity Act had come later in the year 2003 and the earlier Power Purchase Agreement (PPA) was executed when old electricity regime was in place which was at the rate of 2.50/kWh. Therefore, the \"HPERC Regulations-2017\" would not be fastened upon the petitioner as the Agreement was executed 24 years ago could not be held applicable in the given facts and circumstances. Background of the case: 7. A brief summary of facts to the extent relevant, necessary to appreciate the contentions of the parties and for adjudication of this appeal, may be narrated as follows: 8. The writ petitioner-respondent No. 1 herein is a private limited company incorporated under the provisions of the Companies Act, 1956 having its registered office at Chimbalhaar Home Stay Chimbalhaar P.O. Geetapeeth, Kangra, Palampur Himachal Pradesh and is the developer of the 4.5 MW Luni Hydro Power Project situated at village Lulani, P.O. Deol, Tehsil Baijnath District Kangra,H.P. Printed from counselvise.com 7 9. Apparently, for the purpose of development of the said project, an Implementation Agreement was executed between the State of Himachal Pradesh- respondent No. 2 herein and \"SPML” on 31.05.2000 for execution of Luni Hydro Electric Project (hereinafter referred to as the\"LHEP\") of 3.00 MW capacity. On the very same day i.e. 31.05.2000 a \"PPA\" was also separately executed between “SPML” & appellant-Board for sale and purchase of power generated from LHEP (3.00 MW) at tariff of Rs. 2.50 per Killowatt hour (in short \"kWh\"). The “SPML” incorporated a generating Company by the name and style of ‘M/s Luni Power Company (P) Ltd.writ petitioner-respondent No.1 herein and requested the State of Himachal Pradesh to transfer/assign all assets, liabilities, obligations, privileges and benefits of the Project under the Implementation Agreement dated 31.05.2000 to M/s Luni Power Company (P) Ltd. (for short referred to as the \"LPC\"). The State accepted this request and a Tripartite Agreement was executed on 25.09.2004 (Annexure P-3) between “SPML”, State and LPC whereby all assets, liabilities, obligations, privileges and benefits of “SPML” under the Implementation Agreement dated 31.05.2000 were transferred to LPC. The Printed from counselvise.com 8 LPC by conducting further investigations had enhanced the capacity of the Project to 4.50 MW. A revised Techno- Economic Clearance for the enhanced capacity of the Project was accorded by the appellant-Board on 20.03.2007 (Annexure P-4). 10. Thereafter a Supplementary Implementation Agreement (for short referred to as the \"SIA\") was executed between the State of Himachal Pradesh & the new Project Developer-LPC on 01.03.2008 (Annexure P-5). The said agreement also contained the terms & conditions for implementing the Project having revised capacity of 4.50 MW. Thereafter a \"PPA\" was also required to be executed between appellant-Board and LPC pursuant for the execution of SIA on 01.03.2008 but this agreement could not be drawn and executed. 11. It appears that the LPC faced financial crises during the year 2019 due to which Corporate Insolvency Proceedings were initiated against it. Resultantly, the matter was decided by the National Company Law Tribunal on 19.04.2022, approving the takeover of corporate debtor - LPC as per resolution plan submitted by M/s Kundan Care Products Limited, resulting in revival of the respondent- Printed from counselvise.com 9 Company. Thereafter there was total change in the management of the company. Appellants herein consented to transfer all assets, liabilities etc. incurred by LPC out of SIA dated 01.03.2008 to M/s Kundan Hydro (Luni) Private Limited under new management. All share holders of LPC were released from their obligations under the previous Implementation Agreement dated 31.05.2000. 12. Thereafter a Supplementary Implementation Agreement (SIA) was executed between State of Himachal Pradesh and the Kundan Hydro Luni Pvt. Ltd. on 06.07.2024 (Annexure P-7) incorporating the terms & conditions pursuant to change in the management of the Hydro company containing therein revised Project milestones. The Scheduled Commercial Operation Date of the Project (for short the \"SCOD\") was revised to 31.08.2024. On 08.07.2024 (Annexure P-11), the Hydro Company requested the appellant-Board to execute a \"PPA\" with it for purchase of power in respect of LHEP 4.50 MW in accordance with State's notification dated 15.05.2018 read with the provisions of Swaran Jayanti Energy Policy, 2021 and also informed that the Project was ready for commissioning followed by a reminder dated 10.07.2024. Printed from counselvise.com 10 13. Resultantly, appellant-Board, vide office letter dated 16.07.2024, informed that a \"PPA\" already existed between “SPML” and the Board for 3.00 MW capacity at tariff of Rs. 2.50/kWh and Hydro Company would be bound by it. It was further informed by the appellant-Board, that the Supplementary \"PPA\" was required to be executed between the hydro company and the appellant-Board only for incorporating change in the name of the Company, amendment in the Project capacity and for inclusion of composite tariff for the revised capacity of the Project from 3.00 MW to 4.50 MW while keeping the binding nature of the “PPA” dated 31.05.2000 intact for 3.00 MW Capacity. As per this communication, the “PPA” so executed, was to be filed along with joint petition before the Himachal Pradesh Electricity Regulatory Commission (HPERC) for its approval. 14. The said Office letter dated 16.07.2024 was followed by corrigendum issued by appellant-Board on 31.07.2024, whereby certain errors which have crept-in in the office letter dated 16.07.2024 were corrected. For issuing this direction, the appellant-Board brought into play the Regulation No. 17(3) of the HPERC (Promotion of Generation from Renewable Energy Sources and Terms & Printed from counselvise.com 11 Conditions for Tariff Determination) Regulations, 2017 (hereinafter referred to as the \"HPERC Regulations-2017\" for short). 15. The petitioner-Hydro company felt aggrieved against the decision of appellant-Board as communicated to it under letter dated 16.07.2024 and filed the writ petition with the following prayers: \"i. That the Impugned Letter dated 16.07.2024 issued by respondent No. 2 be set aside/quashed. ii. That the impugned PPA dated 31.05.2000 between respondent No. 2 and SPML be declared as non-est and not binding upon the Petitioner. iii. That Respondent No. 2 be restrained from seeking to enforce the impugned PPA against the Petitioner/Project. iv. That the Respondent No. 2 be directed to execute a Power Purchase Agreement with the Petitioner in respect of the entire Project capacity of 4.5 MW, at the HPERC determined tariffs applicable as on the date of commissioning of the Project, in accordance with law. v. That the Respondents be directed to not treat the delay in execution of the PPA between the Petitioner and the Respondent No. 2 as a delay/default on the Petitioner's part.\" 16. The learned Single Judge allowed the said writ petition by a detailed judgment dated 10th September, 2024, and granted the reliefs to the petitioner-Hydro Company as mentioned supra. It is against the said reliefs granted to the Petitioner-Hydro Company, the Appellant- Board has felt aggrieved and filed the instant appeal on the grounds taken in the memo of appeal. Printed from counselvise.com 12 17. It was the admitted case of the parties that Luni Hydro Electric Project (LHEP) with 3.00 MW capacity was allotted to \"SPML”. An Implementation Agreement for execution of the said Project was thereafter executed between State of Himachal Pradesh and “SPML” on 31.05.2000. A separate \"PPA\" was entered into between appellant-Board & “SPML” whereby after adjusting free power, the balance energy was to be sold to the appellant- Board @ Rs.2.50/kWh. Since the “SPML” could not implement the Project, the Luni Power Company Pvt. Ltd. came into picture under a Tripartite Agreement executed on 25.09.2004. A Supplementary Implementation Agreement was executed with it by the State of Himachal Pradesh on 01.03.2008. After undertaking investigations, the capacity of the Project was enhanced by Luni Power Company to 4.50 MW. Subsequently, Luni Power Company faced financial crunches and matter went upto National Company Law Tribunal. Resultantly, the order was passed by the National Company Law Tribunal on 19.04.2022, and Management of the company underwent absolute and complete change and new management had taken the reins of the management of the Company. A Supplementary Implementation Printed from counselvise.com 13 Agreement for the LHEP 4.50 MW was stated to be executed by the State with the Hydro Company (under new management) on 06.07.2024. 18. When the Project was ready for commissioning, the dispute arose only with respect to the rate at which its generated electricity is to be sold/purchased. The appellant- Board had directed the Hydro Company on 16.07.2024 to abide by the rate agreed between erstwhile “SPML” & appellant-Board under the \"PPA\" dated 31.05.2000 for LHEP 3.00 MW and to execute a Supplementary Power Purchase Agreement for revised capacity of 4.50 MW in terms of Regulation 17(3) of the HPERC (Promotion of Generation from Renewable Energy Sources and Terms & Conditions for Tariff Determination) Regulations, 2017, which was not acceptable to the Hydro Company. According to Hydro Company, it cannot be bound down to sell electricity to appellant-Board at the then rate mentioned in the \"PPA\" executed on 31.05.2000 between appellant-Board and the original Project Developer. 19. The stand of the appellant-Board before the learned Single Judge was that as communicated by them in the letter dated 16.07.2024 is that “PPA” for LHEP 3.00 MW Printed from counselvise.com 14 already existed. The aforesaid “PPA” for LHEP (3.00 MW) was executed on 31.05.2000, in terms of the “PPA” dated 31.05.2000, and Hydro Company is bound to sell power to appellant-Board @ Rs. 2.50/kWh. Though the supplementary “PPA” was required to be executed between the appellant- Board and the Hydro Company, but that was required only to reflect the change in the Company's name, amendment in the Project capacity and inclusion of composite tariff for the revised Project capacity of 4.50 MW as per provisions of Regulation No. 17 (3) of the \"HPERC Regulations-2017\". The composite tariff has to be worked out on normative basis for the net sale-able energy corresponding to the enhanced capacity of the Project. Meaning thereby, the stand of appellant-Board was that tariff for original 3.00 MW capacity of LHEP shall remain Rs. 2.50/kWh in terms of “PPA” dated 31.05.2000. For enhanced capacity of 1.50 MW, the tariff will be governed by provisions of the \"HPERC Regulations- 2017\". 20. According to the Hydro Company, it was not privy to the “PPA” executed on 31.05.2000 between the appellant-Board and the “SPML”. It is stated that the aforesaid “PPA” cannot be superimposed upon the Printed from counselvise.com 15 petitioner. The Hydro Company is under no obligation to sell its generated electricity to the appellant-Board at the rate determined 24 years ago (on 31.05.2000). The aforesaid “PPA” dated 31.05.2000 has to be construed as abandoned by its executants as it was never acted upon for more than two decades. Further, the Hydro Company, is stated to be ready and willing to file joint petition for determination of tariff for the Project capacity (4.50 MW) as a whole as on date of commissioning of the Project before the \"HPERC Regulations-2017\", without being bound by the “PPA” or the tariff determined in that “PPA” executed on 31.05.2000 between the appellant-Board and the “SPML”. According to the Hydro Company, in case appellant-Board is not ready to purchase electricity from it in accordance with the rate to be determined by \"HPERC Regulations-2017\", as on the Scheduled Commercial Operation Date, then it be permitted to sell electricity to third parties in accordance with law. Arguments of counsel for the appellant:- 21. The arguments which was raised by counsel for the appellant in order to dispel the reasoning of the learned Single Judge which was primarily on the principle of the alternative remedy which the learned Single Judge had dealt Printed from counselvise.com 16 with, on the ground that the Electricity Act, 2003 was a exhaustive legislation and the remedy under Article 226 of the Constitution of India cannot be entertained. The contention is that once the benefits and privileges of the Implementation Agreement dated 31.05.2000 and the subsequently \"PPA\" of even date in favour of the \"SPML” are sought to be enforced for the revised capacity of 4.50 MW, it amounts to the Writ Court as such for re-writing the terms of the rate of the purchase of power by issuing necessary directions at the present rates determined as in the Scheduled Commercial Operation Date which would be beyond the purview of the Writ Court while exercising its power of mandamus as such. 22. Reliance is placed upon the two judgments of the Apex Court in State of Himachal Pradesh and Another Vs. JSW Hydro Energy Limited and Others 2025 SCC OnLine SC 1460 and KKK Hydro Power Limited Vs. Himachal Pradesh State Electricity Board Limited and Others 2025 SCC OnLine SC 1847 to contend that the function of the State Commission including the price at which electricity is duly procured from the generating companies or licensees is a specialized job. It was the case Printed from counselvise.com 17 of the petitioner themselves that they requested vide communication dated 08.07.2024 (Annexure P-11) to give a suitable date for signing \"PPA\" in respect of the 4.5 MW project to the appellant-Board which had been followed up on 10.07.2024 and it was on the basis of the second Supplementary Implementation Agreement (SIA) executed by the petitioner-Company on 06.07.2024 (Annexure P-7) that the Project as such was complete and ready for commissioning. It is thus submitted that the letter dated 16.07.2024 (Annexure P-13) was in consonance with the earlier Agreements entered into. The predecessor-in- interest of the petitioner and it itself was agitating for its rights as per the \"PPA\" executed earlier on 31.05.2000 for the capacity of 3.00 MW at the tariff of Rs.2.50 per KWh. The composite tariff that had to be worked out and the petitioner had been put to notice that the joint petition had to be filed alongwith a supplementary “PPA” seeking approval of the \"HPERC\" for the amendment of the capacity change in the name of the company to the tune of the composite tariff and therefore, the learned Single Judge was not justified in issuing directions executing the \"PPA\" of 4.50 Printed from counselvise.com 18 MW as per the \"HPERC Regulations-2017\" determined tariff applicable on the Scheduled Commercial Operation Date. Arguments of counsel for the respondents:- 23. Counsel for the respondents-original writ petitioner on the other hand has relied upon the policy in place dated 15.05.2018 (Annexure P-8), whereby the Mandatory Purchase of Power by DISCOM of the entire power generated from the projects having capacity upto 10 MW is to be purchased by HPSEBL at the HPERC determined tariff and which had to be applicable to the projects which had been commissioned after the said notification. The tariff had to be determined with respect to date of achieving Commercial Operation Date (COD) of the project instead of the date of signing of Implementation Agreement (IA). 24. Accordingly, it is contended that there is a policy (Annexure P-10) in place and since the \"PPA\" dated 31.05.2000 was only with the initial Company \"SPML” and there was no privy of Contract, while placing reliance upon Clauses 15.3, 15.10 & 15.18 of the Agreement. It was submitted that the assignment had to be done by the mutual Agreement between the parties and the Agreement was intended for the benefit of the parties and would not be Printed from counselvise.com 19 applicable to the third-party as per Clause 15.3. The Tripartite Agreement under Clause 15.18 having not been entered into had led to the filing of the writ petition as there was a valid cause of action, which was striking down of letter dated 16.07.2024 (Annexure P-13) and seeking directions to execute the \"PPA\" in respect of the entire Project capacity of 4.50 MW at the prevalent rates i.e. the date of commissioning of the Project. The delay in the execution of the \"PPA\" was not on account of the default on the petitioner’s part. 25. Resultantly, it was argued that the agreement dated 01.03.2008 (Annexure P-5) was only an agreement between the Government of Himachal Pradesh and M/S Luni Power Company, Private Limited, whereby the revised Techno-Economic Clearance of the Project for the capacity had been given and the revision had been taken from 3 MW to 4.50 MW and the Power Purchase/Wheeling Agreement(s) was to be signed between the M/S Luni Power Company, Private Limited and Board/concerned party (ies) as per Clauses 12.1 and 14.10 of the said agreement. 26. The judgments relied upon are stated to be not applicable as there was no issue of tariff fixation and the Printed from counselvise.com 20 action was totally and manifestly arbitrary as the petitioner was not a party to the Agreements. Earlier Agreements cannot be enforced to sell power at the rate of Rs.2.5 per MW. Accordingly, it is contended that it was a well reasoned order and did not warrant interference. Our Reasoning to decide the said issue:- 27. As noticed, the prayer of the petitioner is for quashing of the letter dated 16.07.2024 (Annexure P-13) on the premise that the earlier \"PPA\" dated 31.05.2000 (Annexure P-14) is not binding upon it being unenforceable against it not being a signatory. The directions were sought for executing of fresh Power Purchase Agreement in respect of the entire Project capacity of 4.5 that the \"HPERC Regulations-2017\" determined tariffs from the date of the commissioning of the Project. The prayer is now based on the ground that there is a policy of the State which makes it mandatory for the Board to purchase the power from the Projects and having capacity upto 10 MW and the same would be applicable to the Projects should be commissioned after the notification. The relevant part of the said notification reads as under:- Printed from counselvise.com 21 “2. Mandatory Purchase of Power by DISCOM The provisions as contained in Hydro Power Policy, 2006 at Sr. No.3.1(i) of Chapter-IV and subsequent amendments issued from time to time, is amended to the extent that the entire power generated from the projects having capacity upto 10 MW will mandatorily be purchased by HPSEBL at the HPERC determined tariff. The same shall be applicable to the projects which shall be commissioned after this notification. 3. Exemption in Open Access Charges The provisions as contained in Hydro Power Policy, 2006 at Sr. No.3.1(ii) of Chapter-IV and subsequent amendments issued from time to time is amended to the extent and for Projects above 5 MW and upto 25 MW is added as Sr. No.(xxxix) under Chapter-V that no open access charges for the use of intra- State transmission network shall be payable by hydro projects having capacity upto 25 MW which shall be commissioned after this notification. (B) Amendments in the Hydro Power Policy, 2006 by adding new Clause/provision 1. Tariff Determination. A new provision is incorporated under Chapter-IV at Sr. No.3.1(xi) and Chapter-V at Sr. No. (xL) of the Hydro Power Policy, 2006 that the tariff shall be determined by HPERC with respect to date of achieving COD of the project instead of the date of signing of IA. However, this condition shall be applicable only if Project is completed within the stipulated time period as approved in Technical Concurrence (TC) after achieving the zero date except force majeure conditions or reasons not attributable to the developers.” 28. It is not disputed that the directions have to be issued by way of a writ of mandamus and there has to be statutory duty or right which can be enforced by the Writ Court and it is in such circumstances “one has to lift the veil” as to whether the learned Single Judge had any jurisdiction as such to issue the necessary directions especially contained in relief of Clause 7(iii) directing to Printed from counselvise.com 22 execute the \"PPA\" in respect of the entire Project capacity of 4.5 MW of the \"HPERC Regulations-2017\" determined tariff and Scheduled Commercial Operation Date. It is also not beyond the anvil of doubt that the petitioner’s predecessor- in-interest was initially the \"SPML” and then M/s Luni Power Company Private Limited on the basis of the Implementation Agreement (IA) dated 31.05.2000 and the subsequent \"PPA\" dated 31.05.2000 got certain rights to run the Project both in the State and thereafter “SPML” having entered into Power Purchase Agreement with the Electricity Board, wherein the tariff for the Net Saleable Energy and then had been fixed at the rate of Rs.2.50 per Kilowatt which was the fixed term with the rate and not to be changed due to any reasons as per Clause 6.2. The said Clause reads as under:- “6.2 TARIFF FOR NET SALEABLE ENERGY:- The Board shall pay for the Net Saleable Energy delivered by the Company to the Board at the Interconnection Point at a fixed rate of Rs.2.50 (Rupees two and paise fifty) per Kilowatt hour. This rate is firm and fixed and shall not be changed due to any reason whatsoever.” 29. It is not disputed that “SPML” had further entered into Tripartite Agreement dated 25.09.2004 (Annexure P- 3) with M/s Luni Power Company Private Limited and the Government of Himachal Pradesh for transferring/assigning Printed from counselvise.com 23 all the assets, obligations and liabilities and Luni Power Company had agreed and it would be bound by all the assets, liabilities and obligations of the projects and the terms and conditions specified in the Implementation Agreement dated 31.05.2000 executed between the Government and the second party. The Luni Power Company had agreed to perform the Implementation Agreement as if they were the original party of the aforesaid Implementation Agreement in place of the second party. The “SPML” had been relieved from its obligations on the signing of the said Contract. The said Clauses reads as under:- “NOW THIS AGREEMENT WITNESSED AS UNDER AMONG THE PARTIES HERETO AS FOLLOWS: (i) That the Government hereby grants its consent to transfer/assign all the assets, liabilities, obligations, privileges and benefits of the project by the second party to the third party arising out of the Implementation Agreement 31st May, 2000 with the unequivocal acceptance of third party of all the assets, rights, liabilities, obligations, privileges and benefits arising out of above mentioned Implementation Agreement dated 31st May, 2000. Unless otherwise permitted by the Government, this consent is subject to the condition that the third party shall ensure that the second party continues to hold minimum 51% of its equity upto two years after COD of the project. If at a later date it comes to the notice of the Government that this condition has been violated then it shall have the right to terminate the Implementation Agreement dated 31st May, 2000, after affording due opportunity to the third party and also to forfeit the security furnished by the third party as per sub- Printed from counselvise.com 24 clause 4.3 of the Implementation Agreement, and the project with all its capital and infrastructural assets shall vest with the Government. (ii) That the Government hereby releases the second party of all the obligations under the Implementation Agreement dated 31.05.2000 mentioned above and agrees to be bound to the third party in terms thereof. (iii) That the third party hereby agrees that it shall be bound and liable for all the liabilities, obligations and execution of the project on the terms and conditions specified in the Implementation Agreement dated 31 st May, 2000 to the Government. (iv) All the terms and conditions of the Implementation Agreement signed on 31st May, 2000 shall remain the same save and except as provided herein above and wherever expression of “Company” “Generating Company” or second party appear in the Implementation Agreement dated 31st May, 2000, the same shall be read, construed, mean and deemed to be referred to as the third party. (v) That the third party agrees to perform the Implementation Agreement 31 st May, 2000 as if they were the original party of aforesaid Implementation Agreement dated 31 st May, 2000 in place of second party. (vi) That the third party has established its Head Office in H.P. and has undertaken to establish its Regd. Office in HP within Six months from the signing of this Agreement. In the event of failure to do so, this Tripartite Agreement (TPA) shall stand cancelled.” 30. Thereafter, it is only on account of financial exigencies as such that the petitioner has come into picture and got the rights as such in view of the order passed by the National Company Law Tribunal Chandigarh Bench (NCLT) dated 19.04.2022 (Annexure P-6) that the resolution plan of the petitioner as such was approved by the Committee of Creditors under Section 30(6) of the Code Printed from counselvise.com 25 read with Regulation 39 of the CIRP Regulations, 2016. The earlier moratorium order by the adjudicating authority dated 23.12.2019 ceased to have effect. The writ petition thus was filed on the basis of the said order and therefore all the rights and liabilities as such have come landed in the lap of the original writ petitioner and he now cannot take the plea as such that it is not bound by the eariler Agreement entered by the predecessor-in-interest namely M/s Luni Power Company (P) Ltd. 31. As per Section 86(b) of the Electricity Act, 2003, the functions of the State Electricity Commission are to regulate electricity purchase and procurement process of distribution licensees including the price at which electricity is to be procured and to determine the tariff. Section 86(1) (a) & (b) of the said Act reads as under:- “86. Functions of State Commission.-(1) The State Commission shall discharge the following functions, namely:- (a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State: Provided that where open access has been permitted to a category of consumers under Section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers; (b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other Printed from counselvise.com 26 sources through agreements for purchase of power for distribution and supply within the State; 32. It is not disputed that the petitioners itself by virtue of their communication dated 08.07.2024 referred to the Supplementary Implementation Agreement dated 06.07.2024 (Annexure P-7) which was between the Government of Himachal Pradesh and Kundan Hydro Luni Power Company Limited and which gave reference to the earlier Implementation Agreement dated 31.05.2000 and the Supplementary Implementation Agreement dated 01.03.2008 (Annexure P-5) and the State Government had given its consent to transfer and assign all the assets and liabilities which had been incurred by Kundan Hydro Luni Power Company Limited, while noting the order dated 19.04.2022 of NCLT and the fact that the Techno-Economic Clearance had been revised for 4.50 on 20.03.2007 during the intervening period. The relevant part reads as under:- “NOW THIS SUPPLEMENTARY IMPLEMENTATION AGREEMENT WITNESSED AS UNDER AMONG THE PARTIES HERE TO AS FOLLOWS:- (i) That the First Party hereby grants its consent to transfer/assign all the assets, liabilities, obligations, privileges, NOC’s and the benefits of the project incurred by M/s Luni Power Company Private Limited to the Second Party, arising out of the Implementation Agreement (IA) signed on 31.05.2000 & Supplementary Implementation Agreement (SIA) dated 01.03.2008 with the unequivocal acceptance of the Second Party to Printed from counselvise.com 27 accept and take over all the assets, rights, liabilities, obligations, privileges and benefits arising out of above mentioned Implementation Agreement (IA) and Supplementary Implementation Agreement (SIA). (ii) The First Party hereby releases old shareholders of M/s Luni Power Company Private Limited of all the obligations under the Implementation Agreement signed on 31.05.2000 & Supplementary Implementation Agreement dated 01.03.2008 as mentioned above and agrees to bind Second Party in terms thereof. (iii) That the Second Party hereby agrees that it shall be bound and liable for all the liabilities, obligations and operation, maintenance of project on the terms & conditions as specified in the Implementation Agreement signed on 31.05.2000 & Supplementary Implementation Agreement dated 01.03.2008 to the First Party.” 33. Thus, all the rights and liabilities as such of the petitioner company arose from the earlier Implementation Agreements dated 31.05.2000, the \"PPA\" of even date (Annexure P-14) and the Tripartite Agreement dated 25.09.2004 and it would not lie in their mouth to say that they are not bound by the earlier terms, merely, because period of more than 24 years have expired. The petitioner company as such could not be now permitted to wriggle out, if it is still interested in running the project. 34. The Board only had in pursuance of their request dated 8th and 10th July, 2024 which is again based on the agreement dated 06.07.2024 had requested that the composite tariff has now to be determined for the entire Printed from counselvise.com 28 capacity of Luni Power Company Limited 4.5 MW and therefore a draft joint petition be filed before the Electricity Commission. 35. The Board had fallen back on Regulation 17 in the letter dated 16.07.2024 (Annexure P-13) of the ‘Capacity Enhancement’ of HPERC (Promotion of Generation from Renewable Energy Sources and Terms & Conditions for Tariff Determination) Regulations, 2017. The same reads as under:- “17. Capacity enhancement.- 1) Where, after the allotment of the original project, the capacity of a small hydro project is enhanced, with the approval of the State Government, the tariff for sale of net saleable energy from such projects, shall be governed by the relevant provisions of sub-regulations (2) to (8), as applicable. 2) xxxxxxxxx 3) Where, prior to commencement of Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from the Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2017:- (a) in relation to the original capacity of the project or a part thereof.- (i) either synchronization of the same with the Grid has taken place at least once, or (ii) a joint petition for the approval of PPA for purchase/sale of net saleable energy has been filed before the Commission, or (iii) the PPA for the sale/purchase of net saleable energy from the same, whether under REC mechanism or on long term basis has been signed by the developer of the concerned project with the Distribution Licensee; and Printed from counselvise.com 29 (b) in relation to the additional capacity of the project or a part thereof.- (i) neither any synchronization of the same, with the Gird has taken place even once, nor (ii) any joint petition for approval of any PPA (or supplementary PPA), in relation for such additional/enhanced capacity, whether under REC mechanism or long term basis has been filed before the Commission, nor (iii) any PPA, or supplementary PPA for such additional/enhanced capacity has been signed by the developer of the concerned project with the distribution licensee for such additional/enhanced capacity; the tariff for the net saleable energy in relation to the original capacity shall be determined as per the provisions of Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from the Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2012 and the same for the additional capacity shall be determined as per the provisions of Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from the Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2017 as applicable on the date on which the joint petition for approval of PPA in relation to the additional capacity/enhanced capacity is filed before the Commission or on the date on which such additional capacity, or a part thereof, is synchronized with the grid for the first time, whichever is earlier. 4) xxxxxxxxx 5) Where different sets of Commission’s regulations as per sub-regulation 3 of this regulation, or different sets of provisions/norms of Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from the Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2017 as per the provisions under Sub Regulations (4) of this regulation, are applicable for the net saleable energy corresponding to the original capacity and for Printed from counselvise.com 30 the additional capacity, a composite rate shall be worked out on normative basis, for the net saleable energy corresponding to the enhanced capacity, as follows, namely:- (i) the generic levellised tariff applicable for the net saleable energy in relation to the original capacity as per the sub regulation (3) or sub section (4) as applicable, shall be considered for the net saleable energy in relation to the annual energy generation corresponding to 75% dependable year as per the Detailed Project Report for the original capacity, irrespective of the date of signing of the power purchase agreement for the original capacity: (ii) for the net saleable energy in relation to the annual incremental energy generation due to enhancement of capacity i.e. the annual additional energy generation which is expected to take place in the 75% dependable year as per the detailed project report for the enhanced capacity, the generic levellised tariff applicable for the net saleable energy in relation to the additional capacity as per the provisions of 9 sub-regulation (3) or sub- regulation (4), of this regulation, as applicable, shall be considered: Provided that the tariffs considered for the respective energy quantums as per clauses (i) and (ii) of this sub-regulation shall be governed by the respective associated terms and conditions as per the respective power purchased agreements and the applicable provisions for respective capacities:” 36. This aspect apparently skipped the notice of the learned Single Judge while allowing the writ petition. It is thus apparent that the Writ Court has taken over the exercise as such of tariff determination which falls within the exclusive domain of the Electricity Regulation Commission and therefore an error of law has occurred Printed from counselvise.com 31 while issuance of the necessary directions. It is not for this Court to substitute its opinion as to whether the petitioners have to sell power at what rate and therefore the fixation of tariff by the learned Single Judge was not justified. The Project having not seen the light of the day and not being commissioned for all these years, it was an exercise which was to be determined by the Electricity Regulatory Commission rather than forcing the Board as such to enter into an Agreement at the prevalent rates and re-fixing the terms of the Contract as such. It was beyond the purview of the Writ Court on the ground by granting relief 7(iii) that the action was arbitrary and would thus be an exercise by which the power of the Commission has been taken over and the directions have been issued by the Writ Court which is not permissible. 37. Keeping in view the law laid down in JSW Hydro Energy Limited case (supra), wherein the question was framed about the maintainability of the writ petition and reference was made to the earlier decision in Jaipur Vidyut Vitran Nigam Ltd., and Others Vs. MB Power (M.P.) Ltd., and Others (2024) 8 SCC 513 and it has been held that the statutory Regulatory Authority has been entrusted Printed from counselvise.com 32 to discharge the function to deal with tariff determination within the exclusive domain, while interfering with the order of this Court. The relevant paragraphs reads as under:- 34. The above principles are also reflected in a recent decision of this Court in Jaipur Vidyut Vitran Nigam Ltd. v. MB Power (M.P.) Ltd. Here, the High Court exercised writ jurisdiction and directed distribution companies to procure power from bidders, who are generating companies, at the prices quoted in their bids till the requisite quantum of power was procured. Allowing the appeal of the distribution companies, this Court held that the High Court was not Justified in entertaining the writ petition as the Electricity Act is an exhaustive code and all issues dealing with electricity must be considered by the expert bodies, i.e., the Regulatory Commissions constituted under the Act. The relevant portion is extracted hereinbelow: \"128. We find that the High Court was not justified in entertaining the petition. The Constitution Bench of this Court in PTC has held that the Electricity Act is an exhaustive code on all matters concerning electricity. Under the Electricity Act, all issues dealing with electricity have to be considered by the authorities constituted under the said Act. As held by the Constitution Bench of this Court, the State Electricity Commission and the learned APTEL have ample powers to adjudicate in the matters with regard to electricity. Not only that, these Tribunals are tribunals consisting of experts having vast experience in the field of electricity. As such, we find that the High Court erred in directly entertaining the writ petition when Respondent 1 i.e. the writ petitioner before the High Court had an adequate alternate remedy of approaching the State Electricity Commission. 129. This Court in Reliance Infrastructure Ltd. v. State of Maharashtra has held that while exercising its power of judicial review, the Court can step in where a case of manifest unreasonableness or arbitrariness is made out. Printed from counselvise.com 33 130. In the present case, there is not even an allegation with regard to that effect. In such circumstances, recourse to a petition under Article 226 of the Constitution of India in the availability of efficacious alternate remedy under a statute, which is a complete code in itself, in our view, was not justified.\" (emphasis supplied) 35. Grant of Relief by the High Court : Applying these legal principles, we will now analyse whether the High Court could have granted relief of aligning the Implementation Agreement with the CERC Regulations, 2019 by exercising writ jurisdiction. The High Court proceeded on the basis that: (i) the appellant-State is a deemed licensee; (ii) the CERC Regulations, 2019 are relevant not only for determination of tariff but also for other purposes and are binding on the appellant-State; and (iii) the 13% cap on free power supply under Note 3, Regulation 55 has the effect of overriding the free power supply clause in the Implementation Agreement since a similar clause in the PPA and PSAs stands overridden as per the CERC's order dated 17.03.2022. 36. On the first aspect of whether the appellant- State is a deemed licensee, it is clear from the impugned order that the High Court has only cited the statutory provisions on licensing but has neither delved into this issue nor arrived at any express conclusion regarding the same. This is perhaps because the parties did not raise or argue the issue before it. However, before us, respondent no. 1 strongly contends that the appellant-State is a deemed licensee, and the appellant has disputed the same. 37. We are of the opinion that this issue need not be determined on merits, but is relevant to show respondent no. 1's conduct in taking contrary positions by filing the writ petition. On the one hand, it is claiming that the appellant being a deemed licensee is a regulated entity under the Electricity Act. The sequitur of this would be that the appellant, and its contractual rights and liabilities, are subject to the CERC's regulatory jurisdiction. However, respondent no. 1 never sought relief against the appellant-State before the CERC, as we have indicated above, and instead filed a writ petition. Considering the contradictory positions of respondent no. 1, it cannot be allowed Printed from counselvise.com 34 to approbate and reprobate, or blow hot and cold at the same time to secure relief under the law. 38. The second aspect pertains to the interpretation of CERC Regulations, 2019 by the High Court. We have already dealt with the interpretation of the Regulations hereinabove, and will presently deal with the same in the context of maintainability of the writ petition. Under the Electricity Act, the statutory regulator has been entrusted with discharging the function of tariff determination, including making regulations for the purpose and interpreting the same. Constitutional courts must enable the regulator to comprehensively regulate all aspects of the sector such that remedies are not fragmented and certain issues are not left outside the regulator's domain. The regulator has the expertise, specialisation, and institutional memory to conduct such an interpretative exercise to further the objective of the regulatory regime and systematically lay down legal principles. In this light, the High Court should not have entered into the domain of interpreting these Regulations which deal with tariff determination, as the same falls within the exclusive domain of the CERC. The Electricity Act itself provides the appellate mechanisms by establishing a specialised and permanent tribunal, namely the APTEL, and an appeal before this Court, against the CERC's orders. In view of the existence of a statutory regulatory forum, the High Court should not have entertained the writ petition by interpreting the CERC Regulations, 2019. 39. Equally, we are of the opinion that the High Court incorrectly relied on the CERC's order dated 17.03.2022 to grant relief to respondent no. 1. As explained above, the CERC's order only deals with the PPA and PSAS despite taking note of Article 5.1 of the Implementation Agreement. Upon reading the order, it is clear that its effect is not that of restraining respondent no. 1 from supplying free power beyond 13%. Hence, it does not in any way adversely affect or prejudice the-contractual rights of the appellant-State. Hence, the High Court could not have proceeded on the basis of this order to grant the relief of modifying the Implementation Agreement. 40. In view of the above reasons, we hold that CERC Regulations, 2019 do not prohibit respondent no. 1 Printed from counselvise.com 35 from supplying free power beyond 13% to the appellant-State, and the Implementation Agreement does not stand overridden by the operation of these Regulations. Further, a writ petition before the High Court for aligning the Implementation Agreement with the CERC Regulations, 2019 and the CERC's order dated 17.03.2022 is not maintainable. Once respondent no. 1's prayer for relief was rejected by the CERC and it specifically held only the PPA and PSAs to stand overridden, which finding was not further appealed, it would not be open for respondent no. 1 to seek modification of the Implementation Agreement by way of a writ petition before the High Court. 38. The judgment was delivered recently only on 16.07.2025 and therefore, the learned Single Judge did not have the benefit of the said judgment. Another judgment arising from this Court in KKK Hydro Power Limited case (supra) also while dealing with the issue of tariff fixation at the rate of Rs.2.87 and 2.95 per kWh and while dealing with the Appellate Tribunals order has held that while referring to Section 86(1) (b) of the ‘Act’ that the fixing of the price of purchase of electricity is not a matter of private negotiations and Agreements between the generating company and a distribution licensees, while upholding the order of the Appellate Tribunal the Apex Court had come to the conclusion that it required no determination for the 3 Megawatts Hydel Power Projects but only for the additional 1.9 Megawatts was required to be re-determined. Printed from counselvise.com 36 39. In Ramayana Ispat Private Limited and another Vs. State of Rajasthan & Others (2025) 8 SCC 747, the statutory scheme of the Electricity Act, 2003 and the regulations framed by the State Commission were held to be facilitating intra-Sate transmissions and wheeling of electricity and for maintaining disciplines in power scheduling and ensuring that consumers do not gain unfair advantage by evading scheduling norms and for equitable treatment of all market participants while safeguarding the integrity of the power grid. The relevant part reads as under:- “67. Furthermore, the 2003 Act, envisages a balance between the rights of open access consumers and the operational concerns of the power sector. The 2016 Regulations, while imposing certain conditions, do not outright deny open access but ensure that its implementation is equitable and does not jeopardise grid discipline. Open access remains available to consumers who comply with regulatory prerequisites, including scheduling obligations and financial commitments. Thus, the appellant’s assertion that their right to open access is foreclosed is misplaced. The 2016 Regulations are consistent with the legislative intent of the 2003 Act, ensuring that open access is exercised in a manner that does not compromise system stability, fairness, or economic viability. Therefore, the regulatory framework does not foreclose open access but rather operationalises it within reasonable constraints essential for sustaining the electricity sector. Printed from counselvise.com 37 68. The statutory scheme under the 2003 Act mandates that regulations framed by State Commissions must serve the larger public interest. The respondents have successfully established that the impugned Regulations serve this purpose by ensuring equitable treatment of all market participants while safeguarding the integrity of the power grid. 69. RERC derives its authority from the 2003 Act, which vests in it the power to frame regulations governing open access, scheduling, and penalties. Section 86(1)(c) of the 2003 Act specifically empowers State Commissions to facilitate intra-State transmission and wheeling of electricity. Furthermore, Section 181 empowers the Commission to make regulations consistent with the 2003 Act and its objectives. The impugned Regulations have been framed in exercise of these statutory powers. The requirement for scheduling, imposition of penalties, and limits on drawal are not arbitrary but are measures falling within the regulatory ambit of the Commission to ensure grid stability and fair competition. The 2003 Act envisions a structured and fair mechanism for open access while ensuring that market participants do not engage in practices detrimental to the larger consumer base. Moreover, under Section 42 of the 2003 Act, the State Commission has the mandate to regulate open access in distribution and specify the charges and conditions applicable. The respondents have demonstrated that these conditions are necessary for maintaining discipline in power scheduling and ensuring that open access consumers do not gain an unfair advantage over other consumers by evading scheduling norms or penalties. 70. The Jodhpur Bench in common order dated 29-8-2016, which has been challenged before us in Civil Appeals Nos.7965 and 7966 of 2019, has rightly upheld the validity of the 2016 Regulations holding that any inconvenience caused or even some hardship faced by the captive power generators shall not make the Regulations illegal. The High Court also rightly pointed out that the appellants have failed to Printed from counselvise.com 38 establish that the impugned Regulations are in contravention of their rights protected under Part III or any other provision of the Constitution of India or that the Regulations have been enacted without having the competence to do so or they are manifestly arbitrary or unreasonable. It has been rightly held by the High Court that the 2016 Regulations are in consonance with the objects of the 2003 Act and have been framed as per the competence available under Section 181 read with Section 42 of the 2003 Act.” 40. It is thus, apparent that the learned Single Judge has mis-directed itself by choosing to decide the issue on merits and also rejected the plea of alternate remedy on the ground that there was an arbitrary action as such. The Board as such had only recommended that the matter should be placed before the Electricity Regulatory Commission, keeping in view the power as such of the Commission to fix the tariff and once the Regulations had come into force, it was for the Commission to see as to what would be the rate of the tariff to be fixed between the Board and the petitioner under the policy dated 15.05.2018 which makes it mandatory for the Board to purchase the electricity from Projects below 10 MW. 41. Therefore, the judgment passed by the learned Single Judge is not liable to be upheld and the appeal is liable to be allowed. Accordingly, we set aside the judgment Printed from counselvise.com 39 dated 10.09.2024 and relegate the parties to its alternate remedy as suggested by the appellant-Board dated 16.07.2024. Needless to say, it is for the Regulatory Commission as such to fix the tariff as such, keeping in mind all the relevant parameters and the fact that project has been hanging fire since the year 2000. Neither the Board nor the State or the petitioners can be prejudiced on account of the 25 years having been passed and the interest as such would have to be adjudicated, keeping in mind this aspect by the expert body. 42. The appeal stands disposed of accordingly, as indicated hereinabove, along with pending miscellaneous applications, if any. (G.S. Sandhawalia) Chief Justice (Jiya Lal Bhardwaj) Judge 9th January, 2026 (C.M. Thakur/Munish Thakur) Printed from counselvise.com "