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

Supreme Court Verdict: Deemed Export Benefits under Foreign Trade Policy not available to Immoveable Assets, in particular, Thermal Power Plants

Supreme Court Upholds PSPCL’s Stand that Deemed Export benefits under the Foreign Trade Policy, 2004-09 and 2009-14 are only available to movable goods, and not to immovable assets such as coal-based thermal power plants and thereby, rejected the claim of Talwandi Sabo Power Limited and Nabha Power Limited contending withdrawal of Deemed Exports Benefits as Change in Law under the Power Purchase Agreement.

The Hon’ble Supreme Court of India, in its judgment dated 19 August 2025 in Nabha Power Limited v. Punjab State Power Corporation Limited & Ors. (Civil Appeal Nos. 8694 & 8739 of 2017), has delivered a landmark ruling upholding the position consistently taken by PSPCL before the State Commission, Appellate Tribunal, and the Apex Court.

PSPCL’s Contentions Before the Courts

Throughout the proceedings, PSPCL consistently advanced the following positions:

1. Inapplicability of Deemed Export Benefits to Thermal Power Plants which do not manufacture goods in India

o PSPCL argued that the Foreign Trade Policy (FTP) 2009-2014 extended deemed export benefits only to movable goods, and not to immovable assets such as coal-based thermal power plants assembled on-site.

o It was submitted that the legislative framework under the FTP and the Central Excise Act clearly distinguished between movable “goods” and immovable infrastructure. A generating station, embedded to the earth, could not be treated as “manufactured goods.”

2. FTP Benefits were Never Available to NPL/TSPL

o PSPCL highlighted that at the time of bid submission and execution of the Power Purchase Agreement (PPA), no deemed export benefits under Para 8.3 of the FTP were available to the project of Nabha Power Limited (NPL) or Talwandi Sabo Power Limited (TSPL).

3. Withdrawal of Benefits Not a “Change in Law”

o PSPCL had submitted that only statutory enactments or duly notified delegated legislation constitute “Change in Law” under Article 13 of the PPA.

o Administrative circulars, public notices, or press releases, lacking statutory force, could not trigger contractual relief. PSPCL stressed that DGFT’s policy notices were administrative/clarificatory in nature and did not qualify as “law.”

Hon’ble Supreme Court’s Findings

The Hon’ble Supreme Court upheld PSPCL’s contentions and the Appellate Tribunal’s Order, holding that:

• Press Releases or Cabinet communications do not constitute “law” under the Power Purchase Agreement (PPA). Only duly notified statutory instruments published in the Official Gazette qualify for consideration as “Change in Law.” The Hon’ble Court has reiterated the stance taken by the 3 Judge Bench in CA 8694 of 2017.
• Deemed export benefits of the Foreign Trade Policy (2009-2014) were never available to coal-based thermal power projects constructed in-situ, as such projects constitute immovable property and not “goods” as envisaged under the FTP.
• Withdrawal of such benefits by DGFT through policy circulars or notices cannot be construed as a “Change in Law” event under Article 13 of the PPA.

This judgment marks a significant affirmation of PSPCL’s consistent stand before the Punjab State Electricity Regulatory Commission (PSERC), the Appellate Tribunal for Electricity (APTEL), and the Hon’ble Supreme Court.

The ruling safeguards the interests of electricity consumers in Punjab by ensuring that the benefits accruing to the Thermal Power plants on account of grant of Mega Power status shall be fully passed on to the consumers of Punjab. This decision is a significant victory for PSPCL and the electricity consumers of Punjab, ensuring that the sanctity of competitive bidding including the Change in law provisions can accrue in favour of the Procurers as well when there is a negative change in law (reduction in cost after bidding) and tariff discipline is preserved.

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

PSERC affirms the stand taken by PSPCL and denies in-principle approval to TSPL for expenditure ‘yet to be incurred’.

In the dynamic landscape of the energy sector, the recent PPA dispute between TSPL and Punjab State Load Dispatch Centre stands out as a testament to the challenges of intertwining legal frameworks, contractual obligations, and public interest. Delve into this case to understand the intricate balance between sector-specific agreements and the broader societal implications they carry.