The Hon’ble Appellate Tribunal Dismisses Tspl’s Attempt To Expand Scope Of Appeal

Introduction

On 03.11.2025, the Hon’ble Appellate Tribunal of Electricity (the ‘Hon’ble Tribunal’) pronounced the judgment in the matter between Talwandi Sabo Power Limited (‘TSPL’) and Punjab State Electricity Regulatory Commission (the ‘State Commission’). While doing so, the Hon’ble Tribunal has ruled in the favour of Punjab State Power Corporation Limited (‘PSPCL’) and observed that the Application filed by TSPL seeking deemed capacity charges for the year 2014 on account of alleged failure on the part of PSPCL to arrange adequate quantity as well as quality of coal for its power project is beyond the scope of the present appeal. It also held that claims not pleaded or argued before the State Commission cannot be raised for the first time before the Hon’ble Tribunal. 

Background

The appeal presently before the Hon’ble Tribunal arises from orders dated 06.09.2016 and 08.09.2016 passed by the State Commission in Petitions No. 11 of 2012 and 46 of 2012. These proceedings were remanded by the Hon’ble Tribunal through its judgment dated 07.04.2016 (in Appeal Nos. 56 & 84 of 2013) wherein the State Commission was required to pass consequential orders in terms of directions given in the remand judgment.

However, TSPL—nearly nine years later—attempted to inject a fresh, never sought claims relating to deemed capacity charges for the periods July–October 2014 and December 2014allegedly arising from PSPCL’s supposed failure to supply adequate coal.

This claim had its own separate procedural trajectory. TSPL had raised it only in Petition No. 34 of 2015, distinct from the present appeal, which the State Commission referred to arbitration in December 2015. 

In the arbitral proceedings arising from the State Commission’s reference in Petition No. 34 of 2015, TSPL sought, by way of a belated amendment application filed on 20.01.2024, to introduce a new claim for deemed capacity charges for the 2014 period, a claim that had never formed part of the disputes originally referred to arbitration. The Arbitral Tribunal, by its order dated 31.07.2025, rejected the amendment, holding that the 2014 claim fell outside the scope of the reference and could not be imported through an afterthought pleading.

When the Arbitral Tribunal limited the scope of its jurisdiction to the terms of reference and declined to examine the 2014 deemed availability claim, TSPL attempted to bring the issue into the Appeal No. 331 of 2016 pending before the Hon’ble Tribunal, as a supplementary pleading through an I.A. for Urgent Listing filed in September, 2025.

Submission Made by the Parties

TSPL essentially argued as under:

1. The company would be left “remediless” because the Arbitral Tribunal had declined to adjudicate it.
2. The issue ought to be adjudicated to avoid multiplicity of proceedings.
3. PSPCL had allegedly stated before the Arbitral Tribunal that the 2014 claim was “subsumed” within the pending appeal before the Hon’ble Appellate Tribunal.
4. While the arbitral proceedings would address the plea of force majeure raised by it, the issue concerning PSPCL’s coal supply obligation for the year 2014 remained to be adjudicated on merits and, therefore, rightly falls within the scope of the present appeal for consideration by the Hon’ble Tribunal.

PSPCL’s key arguments were as under:

• The 2014 claim was never part of Petitions 11/2012 or 46/2012. Thus, it could not be retrofitted into an appeal arising out of those petitions.
  Note: In fact, the Hon’ble Tribunal has confirmed that no pleadings, prayers, submissions, or issues relating to the 2014 deemed capacity claim exist anywhere in the proceedings giving rise to this appeal.
• TSPL already pursued the 2014 claim separately and failed to amend arbitration. TSPL is bound by its choice to raise the 2014 claim in Petition 34/2015. PSPCL pointed out that the 2014 deemed-capacity claim appeared for the first time in Petition 34 of 2015, which was referred to arbitration. When TSPL later sought, in January 2024, to amend the arbitral pleadings to add this claim, the Arbitral Tribunal rejected the amendment on 31.07.2025, holding that the claim was outside the scope of the reference. Having failed in arbitration, TSPL could not now use this appeal as a substitute original forum. 
• No jurisdiction can be created by alleged “admissions” or equitable pleas. PSPCL, clarified that it never admitted that the 2014 claim fell within this appeal. Any references made during arbitration were jurisdictional objections, not concessions. In any event, PSPCL argued, jurisdiction cannot arise from a party’s statement, and an appellate court cannot decide a dispute never adjudicated below. 
• Jurisdiction cannot be created by assertions of “prejudice”: Even if an arbitral ruling constrains TSPL, the remedy lies in challenging the arbitral order, not reshaping the pending appeal.
• TSPL, under the pretext of seeking urgent listing, was in fact attempting to raise a new claim for capacity charges for the year 2014, a matter that was never decided by the State Commission, nor part of the present appeal. PSPCL emphasized that TSPL had not filed any application to amend its appeal under Order VI Rule 17 CPC, rendering the request procedurally defective.

Analysis and Conclusion

The Hon’ble Tribunal while appreciating the submissions of PSPCL took a view that the held that the claim sought to be introduced by TSPL was beyond the scope of the pending appeal and therefore not maintainable.

The Hon’ble Tribunal observed that the present appeal (Appeal No. 331 of 2016) emanates from the orders dated 06.09.2016 and 08.09.2016 passed by the State Commission in Petitions Nos. 11 and 46 of 2012, which themselves were remanded for limited reconsideration pursuant to the Tribunal’s earlier judgment dated 07.04.2016 in Appeal Nos. 56 and 84 of 2013. The issues in those proceedings were confined to the question of PSPCL’s obligation to execute the Fuel Supply Agreement (FSA) and the Fuel Transportation Agreement (FTA) with Mahanadi Coalfields Limited and the Indian Railways, respectively.

In contrast, the claim for deemed capacity charges for the year 2014 arose subsequently and was raised by TSPL for the first time in Petition No. 34 of 2015, which had been referred to arbitration by the State Commission vide order dated 07.12.2015. The Hon’ble Tribunal has duly observed that TSPL could not use the present appeal to cure that jurisdictional defect or bypass the arbitral rejection.

In light of the above, the concluded that the claim of appellant for deemed capacity charges pertaining to the year 2014 on account of alleged failure on the part of PSPCL to arrange adequate quantity as well as quality of coal for its power project is totally alien to this appeal and therefore, appellant cannot be permitted to file any pleadings/documents/data/submissions etc. with regards to the same in this appeal, as sought vide prayer (b) of the application.

Thus, the above Judgment reinforces a critical principle of appellate discipline, that parties cannot expand or reshape the scope of an appeal to introduce fresh causes of action never adjudicated by the original forum. It strengthens procedural certainty in regulatory litigation by affirming that jurisdiction must be rooted in the pleadings and statutory architecture not in afterthought claims or strategic manoeuvring.

Appeal made by:
Reeha Singh and Shirin Gupta

Represented by:
Poorva Saigal, Shubham Arya and Reeha Singh in – TSPL Case

 Read the order in detail

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The Anatomy of a PPA Dispute in India: From Notice to Remedy

Understanding Power Purchase Agreement Disputes in India

The power sector in India has evolved quite a bit lately, and Power Purchase Agreements (PPAs) form the backbone of electricity generation and distribution. These contracts define how electricity generators, whether renewable or conventional, sell power to distribution companies (DISCOMs), ensuring commercial certainty and grid stability. However, as tariffs evolve, renewable targets expand, and regulatory frameworks tighten, power purchase agreement disputes in India have grown both in number and complexity.

A typical PPA dispute resolution in India can arise from multiple fault lines, including delays in project commissioning, disputes over tariff adjustments, curtailment of power by DISCOMs, or claims under the “Change in Law” clause. Each such disagreement can spiral into full-fledged regulatory litigation spanning multiple forums—from State Electricity Regulatory Commissions (SERCs) to the Appellate Tribunal for Electricity (APTEL), and sometimes even the Supreme Court.

This article breaks down the litigation lifecycle of a PPA dispute in India—from the moment a notice is issued, through the maze of jurisdictional forums, to the final remedies available to aggrieved parties.

 

What Triggers PPA Disputes in India?

Disputes under Power Purchase Agreements (PPAs) usually stem from mismatched expectations between generators and distribution licensees (DISCOMs), or from regulatory and operational challenges that disrupt project timelines and commercial viability. 

Below are the most common triggers in PPA disputes in India:

1.Tariff Disputes

Tariff determination is one of the most litigated aspects of any electricity regulatory dispute in India. 

Generators often lock in tariffs through competitive bidding or under cost-plus mechanisms approved by the State Electricity Regulatory Commission (SERC). Conflicts arise when:

• A DISCOM refuses to honour an agreed tariff, citing “unviable rates” or “change in circumstances.”
  
• The generator seeks tariff revision under the Change in Law clause due to new taxes, duties, or policy changes.
  
• Retrospective tariff reductions or renegotiations are attempted by state utilities, often seen in renewable energy PPAs (notably in Andhra Pradesh and Gujarat cases).

2.Commissioning Delays (COD) and Construction Hurdles

The Commercial Operation Date (COD) determines when the project is deemed ready to supply power. Delays in achieving COD, whether due to force majeure, delay in grid connectivity, or financing issues, often lead to disputes. 

DISCOMs may impose Liquidated Damages (LDs) or encash Performance Bank Guarantees (PBGs), while developers may argue that delays were beyond their control, such as late evacuation approvals or right-of-way obstructions.

3.Curtailment of Power and Grid Backdowns

Curtailment refers to situations where DISCOMs refuse to schedule or offtake power even though it is available for supply. 

While PPAs often guarantee “must-run” status for renewable plants, especially solar and wind, state load dispatch centres (SLDCs) sometimes curtail generation citing “grid security.” 

Developers argue this amounts to a breach of PPA unless backed by valid technical grounds.

4.Change in Law and Policy Transitions

One of the most contentious areas in PPA dispute resolution in India involves the Change in Law clause. Introduction of new taxes (like GST), safeguard duties on solar modules, or changes in transmission regulations can significantly affect project economics.

Developers typically seek pass-through of these costs, while DISCOMs resist on procedural or interpretational grounds, leading to regulatory litigation.

Contractual Preconditions Before Litigation

Before a power purchase agreement dispute in India matures into a regulatory or arbitral proceeding, parties must navigate several contractual preconditions embedded in the PPA itself.

These clauses serve as both a compliance checklist and a procedural gatekeeper.

1.Conditions Precedent (CPs)

Most PPAs stipulate a list of Conditions Precedent (CPs) that the developer must fulfil before the agreement becomes fully operational. These may include:

• Achieving financial closure
  
• Securing land and statutory approvals
  
• Executing grid connectivity and transmission agreements
  

If CPs are not satisfied within the stipulated period, DISCOMs may terminate the PPA or encash the developer’s Performance Bank Guarantee (PBG). However, delays often stem from state authorities’ slow approvals—raising questions of equity and fairness. 

2.Commercial Operation Date (COD)

The Commercial Operation Date marks the official commencement of power supply obligations. 

Disputes arise when DISCOMs allege the project was not “ready for dispatch,” while developers argue that grid non-readiness delayed synchronization. Evidence such as grid inspection reports, testing certificates, and SLDC communication logs play a vital role in proving whether COD was legitimately achieved.

3.Liquidated Damages (LDs) and Performance Bank Guarantees (PBGs)

LDs are pre-agreed penalties for delay or non-performance, while PBGs act as financial security. DISCOMs often encash PBGs citing commissioning delays or breach of PPA. 

Developers typically challenge such encashments as arbitrary or contrary to force majeure provisions. Regulatory bodies like CERC and SERCs have repeatedly held that LDs and PBGs cannot be enforced if delays stemmed from events beyond the developer’s control or if the utility itself contributed to the delay.

4.Notice and Cure Periods

Before initiating a formal claim or termination, PPAs generally require issuance of notice and allow a cure period for rectification. A failure to issue or properly serve notice can invalidate later proceedings.

These preconditions form the procedural foundation of every PPA dispute resolution in India. Observing them meticulously can prevent premature litigation and strengthen the developer’s case before the SERC or APTEL.

Forums & Hierarchy

The appropriate forum is critical in a power purchase agreement dispute in India, as jurisdiction determines both procedural timelines and the nature of available remedies. PPAs often contain arbitration clauses, but statutory disputes under electricity law can sometimes override contractual choices.

1.State Electricity Regulatory Commissions (SERCs)

SERCs are the first point of contact for most PPA disputes, particularly those involving:

• Tariff disagreements
  
• Claims for damages due to curtailment
  
• Enforcement of PPA obligations under the Electricity Act, 2003
  

SERCs have quasi-judicial powers to issue orders binding both generators and DISCOMs. Filing before a SERC is generally mandatory for disputes relating to regulated tariffs or grid operations, unless the PPA explicitly carves out arbitration for such claims.

2.Appellate Tribunal for Electricity (APTEL)

Aggrieved parties can appeal SERC orders to APTEL, which serves as the national-level appellate authority. Key characteristics include:

• National jurisdiction, addressing cross-state disputes
  
• Power to award damages, direct specific performance, or remand cases to SERCs
  
• Precedents set in APTEL PPA cases (e.g., Andhra Pradesh Solar PPA disputes) often guide future litigation
  

APTEL appeals are particularly common when SERC orders are perceived as inconsistent, delayed, or procedurally flawed.

3.Writ Jurisdiction

When parties believe statutory bodies have exceeded powers or violated fundamental rights, writ petitions under Article 226/32 of the Constitution may be filed in High Courts or the Supreme Court. These are exceptional remedies, usually pursued to secure:

• Stay of PPA termination
  
• Interim injunctions preventing encashment of PBGs
  
• Clarification on regulatory interpretation

4.Arbitration Carve-Outs

Some PPAs include arbitration clauses for commercial disputes. However, Indian courts have clarified that statutory obligations under the Electricity Act cannot be completely ousted by arbitration. Typically:

• Purely contractual claims (e.g., late payment penalties, indemnities) can go to arbitration
  
• Regulatory claims, tariff revision, or change-in-law disputes remain under SERC/APTEL jurisdiction
  

Evidence Strategy

In any power purchase agreement dispute in India, the strength of the case often hinges on meticulous evidence collection and presentation. Regulators and tribunals closely examine whether obligations were met, whether delays were excusable, and whether losses claimed are substantiated.

1.Grid Readiness and Evacuation Delays

One of the most frequent points of contention is whether the generator was ready to supply power and whether the DISCOM facilitated evacuation. Evidence includes:

• Grid synchronization certificates from the State Load Dispatch Center (SLDC)
  
• Communication logs for connectivity approvals
  
• Dispatch schedules showing actual versus scheduled generation
  

2.Metering and Energy Accounting Records

Accurate metering is critical to prove both delivery and shortfall of electricity. Documentation that regulators scrutinize includes:

• Meter calibration certificates
  
• Monthly energy accounting reports
  
• SLDC and DISCOM dispatch reconciliations
  

3.Force-Majeure Proof

Force majeure clauses protect generators from liability for events beyond their control. Commonly invoked scenarios are:

• Natural disasters (floods, cyclones)
  
• Grid failures beyond developer control
  
• Regulatory or policy delays
  

4.Documentary Trail of Notices and Communications

Every notice, email, or response related to contractual obligations, cure periods, or dispute escalation is crucial. A well-maintained documentary trail can:

• Prove that statutory and contractual preconditions were followed
  
• Demonstrate proactive mitigation efforts by the developer
  
• Strengthen claims before SERCs or APTEL
  

Conclusion

A power purchase agreement dispute in India is rarely a straightforward contract case—it sits at the intersection of regulatory oversight, commercial obligations, and public policy. Understanding the contractual framework, following procedural prerequisites, choosing the right forum, and building a sound evidentiary record are critical to securing relief.

For both developers and DISCOMs, proactive compliance and timely dispute management are the only sustainable strategies in India’s maturing power market.

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PSPCL Secures Strategic Relief from APTEL in Tariff Adjustment on account of availment of Accelerated Depreciation

The Appellate Tribunal for Electricity (‘APTEL’) has granted interim relief to Punjab State Power Corporation Limited (‘PSPCL’) in Appeal No. 20 of 2025 vide its Order dated 22.07.2025, effectively staying the operation of the Punjab State Electricity Regulatory Commission’s (‘PSERC’) Order dated 05.12.2024 involving tariff adjustments linked to Accelerated Depreciation claims.

The appeal, filed by PSPCL, challenges PSERC’s interpretation and implementation of APTEL’s earlier remand directions issued in Appeal No. 60 of 2024. Despite clear instructions from APTEL to examine whether the Respondent Generator – a Co-gen Plant had availed the benefit of accelerated depreciation under Clause 2.1.1(ii) of the Power Purchase Agreement (PPA), the PSERC failed to conduct this mandated inquiry.

It was also brought to the APTEL’s attention material from the Generators own Income Tax Returns demonstrating that depreciation had, in fact, been claimed @ 80% —an indicator of Accelerated Depreciation benefits. These facts, though undisputed, had not been considered by the PSERC.

APTEL has held that PSPCL had established a prima facie case and that the balance of convenience weighed in its favour. Noting that requiring PSPCL to refund adjusted amounts would be unjust, APTEL ordered an interim stay on the PSERC order pending final adjudication of the appeal.

Read Order

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Supreme Court’s Ruling on Change in Law Claims: Haryana Discoms vs GMR Kamalanga Energy Limited

What’s the impact of the Supreme Court ruling in favour of Haryana Discoms over GMR’s Change in Law claims? Unravel the legal complexities of this significant judgment here.

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APTEL Stays The Order of Central Commission Allowing The Claim for Deemed Fixed Charges From Distribution Licensees Not Procuring Any Power As Claimed Under the Section 11 Directions Issued By The Ministry of Power

On 18.04.2023, the Hon’ble Appellate Tribunal for Electricity (‘APTEL’) passed an order in an Appeal filed by Haryana and Punjab Utilities, staying the Order dated 03.01.2023 passed by the Central Electricity Regulatory Commission (‘CERC’) in the Petition filed by Tata Power Company Limited (‘Tata Power’) seeking compensation on account of the ‘adverse financial impact’ in terms of Section 11(2) of the Electricity Act, 2003.  

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