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2019 SCC OnLine CERC 39

In the Central Electricity Regulatory Commission†

(BEFORE P.K. PUJARI, CHAIRPERSON AND DR. M.K. IYER, MEMBER)

Kudgi Transmission Limited … Petitioner;

Versus
Bangalore Electricity Supply Company Ltd. and
Others … Respondents.
Petition No. 248/MP/2016 with IA No. 64/2016‡
Decided on January 24, 2019
Advocate who appeared in this case :
Shri Alok Shankar, Advocate, KTL
ORDER
Background
The Petitioner, Kudgi Transmission Limited (“KTL”) is a company
incorporated under the provisions of Companies Act, 1956 as a wholly
owned subsidiary of REC Transmission Projects Company Limited
(RECTPCL), with the objective to establish the transmission system for
evacuation of power from Kudgi Thermal Power Station (3 × 800 MW in
Phase-I) (‘Kudgi TPS’) of NTPC on Build, Own, Operate and Maintain
(BOOM) basis and to act as the Transmission Service Provider (TSP)
after being acquired by the successful bidder. RECTCPL was notified by
the Ministry of Power, GOI vide notification dated 8.10.2012 as the Bid
Process Coordinator (BPC) for the purpose of selection of bidder as TSP
to establish the project on BOOM basis through tariff based competitive
bidding process.
2. The Respondents are Long Term Transmission Customers (LTTCs)
of the Petitioner who had entered into Transmission Service Agreement
(TSA) with the Petitioner on 14.5.2013. The Respondent No. 1,
BESCOM has been appointed and authorized to represent all the LTTCs
for discharging the rights and obligations of the LTTCs as Lead LTTC, as
per Article 18.1.1 of the TSA. Power Grid Corporation of India Limited
(PGCIL) in its capacity as CTU and also in its capacity as a transmission
licensee is developing the Narendra sub-station. The list of the long
term transmission customers with their respective allocations in the
transmission capacity developed by the Petitioner is as under:
S. Name of LTTCs % Allocated
No Project Capacity
1 ANDHRA PRADESH & TELANGANA
a. Northern Power Distribution Company of 3.26% (66.35 MW)
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Telangana
b. Eastern Power Distribution Company of 3.25% (66.06 MW)
Andhra Pradesh Limited
c. Southern Power Distribution Company of 4.58% (93.11 MW)
Telangana
d. Central Power Distribution Company of 9.47%(192.58 MW)
Andhra Pradesh Limited
KARNATAKA
2 Power Company of Karnataka Limited
(“PCKL”) (PCKL has signed TSA on behalf
of following Discoms)
a. Bangalore Electricity Supply Company 29.19%(593.57
Limited MW)
b. Gulbarga Electricity Supply Company 7.80% (158.62
Limited MW)
c. Hubli Electricity Supply Company Limited 10.69% (217.48
MW)
d. Mangalore Electricity Supply Company 4.90% (99.65 MW)
Limited
e. Chamundeshwari Electricity Supply 6.24% (126.92
Company Limited MW)
KERALA
3 Kerala State Electricity Board 5.86% (119.18
MW)
TAMIL NADU
4 Tamil Nadu Generation and Distribution 14.76% (300.10
Company Limited MW)
3. Pursuant to the bifurcation of the then State of Andhra Pradesh
into new States of Andhra Pradesh and Telangana, the share identified
for the utilities in the then State of Andhra Pradesh got divided
between the distribution licensees in the new State of Telangana and
the new State of Andhra Pradesh.
4. In accordance with the tariff based competitive bidding guidelines
for Transmission Service notified by the Ministry of Power, GOI on
17.4.2006 under Section 63 of the Electricity Act, 2003, M/s L&T
Infrastructure Development Projects Limited (“L&TIDPL”) was selected
as a successful bidder with the lowest levellised transmission charges.
Accordingly, Letter of Intent (LOI) was issued by the BPC on 31.7.2013
to L&T IDPL to establish the transmission system required for
evacuation of power from Kudgi TPS of NTPC Limited. The project
involves the development of the following transmission elements:
Sl. Scope of Work Completion
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No Target
1 (Kudgi TPS-Narendra (New) 400kV2 × 18 months from
D/C quad Lines effective date
2 Narendra (New) - Madhugiri 765 kV D/C 28 months from
Line effective date
3 Madhugiri - Bidadi 400 kV D/C (quad) 28 months from
Line effective date
5. In accordance with the competitive bidding guidelines, the BPC
started preliminary works on the project. The BPC incorporated the
Petitioner herein as Special Purpose Vehicle (SPV) for the project and
initiated steps for obtaining initial consents. Thereafter in terms of the
bid documents, L&T IDPL acquired 100% equity holding in the
Petitioner Company on 30.8.2013 after execution of the Share Purchase
Agreement and started implementing the project.
6. The Commission by order dated 7.1.2014 in Petition No.
191/TL/2013 had granted Transmission License to the Petitioner.
Thereafter, the Commission approved and adopted the levellised
transmission charges for the project by its order dated 8.1.2014 in
Petition No. 190/TT/2013. The financial closure of the Project was
achieved on 24.2.2014. Notice to Proceed was issued by the Petitioner
on 28.1.2014 and Engineering Procurement and Construction (EPC)
Contract was entered into between the Petitioner and L&T IDPL on
21.2.2014.
7. The Ministry of Power, GOI on 22.5.2014 granted approval under
Section 164 of the Electricity Act, 2003 conferring the powers of
Telegraph Authority on the Petitioner for placing of electric lines or
electrical plant for transmission of electricity. After adoption of tariff
and approval of MOP under Section 164 of the 2003 Act, the Petitioner
had started implementing the project in full steam.
Submissions of the Petitioner
8. In the above background, the Petitioner in this Petition has
submitted the following:
(i) All ‘conditions subsequent’ under the TSA were satisfied by the
Petitioner within the time frame stipulated under the TSA. The
construction works on the site commenced immediately after the
NTP was issued by the Petitioner. The Petitioner over-came serious
law & order and ‘Right of Way’ issues and completed the
construction of the Element 1 on 27.3.2015. All the long term
transmission customers and other concerned agencies (Central
Electrical Authority, NTPC & CTU) were informed of the completion
of Element 1 of the Project.
(ii) The Project is proposed to be developed as evacuation facility for
Kudgi TPS. Accordingly, the following interconnection facilities had
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to be developed prior to the commissioning of the Element 1 of

the transmission project:
Sl Name of the Interconnection facility
No. Agency
1 Kudgi TPS of NTPC 400 kV Bays allotted to KTL for
connecting Element 1
2 PGCIL Narendra (New) 765/400kV Pooling
station - Respective Bays allotted to KTL
for connecting Element 1
3 PGCIL 1 no. Multi Circuit Tower for terminating
2 circuits (second 400kV D/C line) of
Element 1
(iii) The scheduled commercial operation date for Element 1 was
28.2.2015. However, the Petitioner had completed the entire
scope of work for Element 1 on 27.3.2015. The LTTCs, the Central
Electrical Authority (CEA), NTPC & CTU have not disputed this fact
of the completion of Element 1 by 27.3.2015. However, due to
non-availability of inter connection facility required to be
developed by NTPC and PGCIL, the Element 1 could not be tested
and charged.
(iv) The Petitioner had submitted an application to the Electrical
Inspectorate, CEA on 27.1.2015 for conducting inspection of the
line. However, CEA expressed its inability to inspect the line as
the charging facility was not available at both the ends. Thus,
despite the completion of the line in March'2015, the Petitioner
could not declare the COD of Element 1.
(v) The Petitioner thereafter approached this Commission as the
delay in commissioning of the Element1 was for reasons beyond
the control of the Petitioner and for the CEA to inspect the
transmission line and allow the Petitioner to declare ‘deemed
commissioning’ in terms of Article 6.2 of the TSA.
(vi) While the Petition was pending, the progress of transmission line
associated with the Kudgi generating station was reviewed by CEA
on 24.4.2015. CEA directed NTPC and PGCIL to ensure completion
of 400 kV Bays at Narendra sub-station and Kudgi switchyard by
June, 2015 so that KTL could charge their Kudgi - Narendra (New)
400 kV 2 × D/C line by June, 2015. Both NTPC and PGCIL failed
to comply with the said directions issued by CEA.
(vii) Thereafter, the CEA in its meeting on 10.7.2015 again reviewed
the progress of the generating station and the transmission lines
associated thereto. Accordingly, CEA advised NTPC and PGCIL to
complete the 400 kV bays and Narendra (New) - Narendra 400 kV
Transmission Line by July, 2015 and August, 2015 respectively
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and also advised the Chief Engineer (EI), CEA to inspect the
Kudgi STPS - Narendra (New) 400 kV 2xD/C Lines of the
Petitioner at the earliest.
(viii) Pursuant to the directions of the CEA, the Element 1 was
inspected and declared ready for charging on 28.7.2015. As per
Article 6.2 of the TSA, an element is deemed to be complete 7
days after the Transmission Service Provider (the Petitioner
herein) declares the facility is ready for charging. Thus, in terms
of the TSA, the Petitioner declared the line to be under
commercial operation from 4.8.2015. The commercial operation
date was notified to all the Long Term Transmission Customers
vide letter dated 6.8.2015.
(ix) In this background and context, it is clear that the Petitioner had
completed all the works in relation to the Element 1 and was
ready and would have achieved COD in April, 2015, as all items
under its scope of work was completed by 27.3.2015. The
inspection for declaration that the lines are ready for charging was
delayed only due to inter-connection facility at both the ends of
the line being unavailable. In view of this, the COD of Element 1
could be declared in 4.8.2015. The delay in declaration of COD of
the Element 1 had a cascading impact on the construction
activities of other elements of the system also.
(x) Notwithstanding the impact on the construction schedule of
Element 2 and Element 3, the Petitioner had fully completed
these elements of the Project. The other elements of the Project
i.e. Element 2 and Element 3 were required to be completed by
31.12.2015 (i.e 10 months after the original completion date of
Element 1). However, the COD of Element 2 was declared on
19.9.2016 and Element 3 on 27.7.2016. The certificate for
energization for Element 3 and Element2 was received from CEA
on 4.7.2016 and 10.9.2016 respectively.
(xi) In addition to the cascading impact that the delay in COD of
Element 1 and non-payment of tariff for Element 1 had on the
construction of Elements 2 and 3, the following were the reasons
not attributable to the Petitioner and beyond the reasonable
control of the Petitioner forcing the delay in the declaration of COD
of Elements 2 and 3:
(i) Non-availability of Interconnection facility for Elements 2 and
3;
(ii) Right of Way issues at various villages comprised in Ballari,
Bijapur, Chitradurga, Koppal, Tumkur and Ramanagara
Districts;
(iii) Law and order issues at Bijapur, Ballari, Tumkur and
Ramanagara Districts; and
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(iv) Delay in obtaining the Right of Way from the landowners for
the lands claimed by Karnataka Industrial Areas Development
Board (KIADB) as notified land for acquisition.
(xii) As regards inter-connection facility, the Petitioner vide letter
dated 16.11.2015 had informed BESCOM (the Respondent No. 1)
about the nonavailability of interconnection facilities required for
the completion of Elements 2 and 3. Due to non-availability of
interconnection facilities, inspection by CEA was delayed which
had impacted the COD of the Project. The decision for charging
765 kV line on 400 kV lead to indecisiveness on which bay the
lines were to be terminated which has resulted in inordinate
delay. The interconnection facility for second element was made
available only on 6.9.2016 and third element in August, 2016 and
therefore, there was uncontrollable delay of about 9 months in
declaration of COD. Clearly, the delay is due to the fault of the
LTTC and by no standard can be attributable to the Petitioner. As
per Article 4.2 of the TSA, making available inter-connection
facility is the sole responsibility of the LTTCs.
(xiii) In addition to the above, due to law and order situation, certain
parcels of private land in Tumkur and Ramanagra have remained
inaccessible. Despite the District Collector notifying the rate
payable as compensation, the local leaders did not allow access to
the site. The Petitioner has been ready and willing to pay the
compensation as determined by the District Collector. However,
the demand for compensation was akin to the market rate for sale
and purchase of land in the area.
(xiv) The Petitioner had sought all possible assistance in relation to
the issue and even sought police protection for the personnel and
machinery of the Petitioner and its contractors. Correspondence in
relation to issues in Tumkur and Ramanagara between the
Petitioner and BESCOM has been furnished by the Petitioner.
(xv) The Petitioner further informed BESCOM that as soon as KIADB
refused to grant permission for the original route, the Petitioner
vide letter dated 26.5.2015 had submitted an application for
approval of the revised alignment and permission to undertake
works thereon. The Petitioner vide letter dated 24.11.2015 had
informed BESCOM about the refusal of KIADB to grant approval
for the original alignment of Element 2. The route plans had to be
revised as per instructions of KIADB. Despite making all efforts in
relation to such land, KIADB failed to grant approval for the same.
(xvi) The Petitioner vide its letter dated 21.12.2015 appraised the
Lead LTTC, i.e. BESCOM about the problems being faced by the
Petitioner in the completion of Elements 2 and 3 as a result of non
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-availability of KIADB land and further requested for extension of

the Scheduled COD on day to day basis, in terms of Article6.1.2 of
the TSA. BESCOM vide letter dated 8.12.2015 addressed to
KIADB had requested KIADB to resolve/sort out the Right of Way
(ROW) issues on the Government land to enable the Petitioner to
complete its scope of work in accordance with the TSA.
(xvii) It is evident that BESCOM had acknowledged that the
completion of work was stalled only due to non-availability of land
which had been notified by KIADB. However, BESCOM through its
letter dated 30.1.2016 instead of agreeing to a revised COD,
directed the Petitioner to approach this Commission and CEA for
appropriate relief.
(xviii) CEA has at all times been kept informed about the difficulties
faced by the Petitioner in relation to the project. CEA vide its
letter dated 20.10.2015 requested KIADB to resolve/sort out the
right of way issues in relation to construction of Elements 2 and 3
of the Project.
(xix) Ultimately, it is failure on the part of BESCOM, the lead LTTC,
which had failed to extend the Scheduled COD without reasons or
justification despite being aware that the Petitioner was not at
fault. Despite the Petitioner having been granted approval under
Section 164 of the Electricity Act, 2003, where it can enter upon
land for the placing of electric lines or electrical plant for the
transmission of electricity, but in terms of Section 10 of the
Indian Telegraph Act, 1885, such power cannot be exercised qua
land vested in the local authorities.
(xx) Therefore, the approval of the local authority which is vested
with the powers for control and management of land is essential
in the event the land vests in such local authority. In view of this,
the Petitioner was unable to complete the portion of the Elements
2 and 3 which required access to land notified by KIADB.
(xxi) The non-availability of interconnection facility, denial of
approval for undertaking works on land notified by KIADB land
and law and order issues in Tumkur and Ramanagra had a direct
impact on the works in relation to Elements 2 and 3 of the Project.
These reasons are beyond the control of the Petitioner.
Accordingly, the Petitioner vide letter dated 21.12.2015
approached BESCOM and requested that Scheduled COD dates for
Elements 2 and 3 be revised in the light of the hardship faced by
the Petitioner.
(xxii) In terms of Articles 4.4.2 and 4.4.3 read with Article 11 of the
TSA, the Petitioner is entitled to a day for day extension in the
event the Petitioner was prevented by an event of force majeure
in performing its obligation to commission the elements by their
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respective commercial operation dates.

(xxiii) The definition of force majeure is an inclusive definition and
includes any event or combination of events which wholly or
partially prevents or unavoidably delays the performance of
obligations of an affected party in the TSA. Any event which is not
covered within the exclusion of force majeure event identified
under Article 11.4 and prevents or unavoidably delays the
performance of a party in carrying out its obligation would be an
event of force majeure. The reasons for which the works in
relation to Elements 2 and 3 could not be completed were for
factors beyond the control of the Petitioner which could not have
been avoided by the Petitioner even after exercise of due care and
compliance with prudent utility practices.
(xxiv) The force majeure provision of the TSA incorporates principles
of equity as no person should be penalized for failure to comply
with the contractual obligations if they have taken all reasonable
efforts to complete the works but are prevented by unforeseen
reasons beyond their reasonable control. Judgment of the Hon'ble
Supreme Court in Dhanrajamal Gobindram v. Shamji Kalidas &
Co, (1961) 3 SCR 1020 : AIR 1961 SC 1285 has been referred to.
(xxv) The efforts made by the Petitioner in relation to complete
entire works is not just undisputed but is established by the
timely completion of the Element 1 of the Project. The occurrence
of an event of force majeure and provisions of TSA mandating
revision of the Scheduled COD are admitted and hence the
Petitioner is entitled for day to day extension of SCOD. BESCOM
vide letter dated 30.1.2016 did not dispute any of the contention
of the Petitioner but instead of agreeing to a revision of the SCOD,
directed the Petitioner to approach this Commission for
appropriate relief.
(xxvi) Despite being fully aware of the events that caused the delay
in construction of Elements 2 and 3 of the project, BESCOM vide
letter dated 5.12.2016 claimed Liquidated Damages (LD) for delay
in the completion of the project. In the said letter, BESCOM has
alleged that there is a delay of 244 days in declaring COD of the
project and therefore, the Petitioner has to pay LD to all the LTTCs
in proportion as per TSA within 10 days failing which action will
be initiated as per TSA i.e invoking Bank Guarantee. The said
communication is illegal, unwarranted and abuse of dominant
position of the Respondents and is without any basis with an
attempt to unjustly enrich itself at the cost of the Petitioner.
(xxvii) The said communication of BESCOM is bad since it has
inherent contradictions. While the first para of the said letter
states that the construction of Elements 2 and 3 are still not
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complete, BESCOM computes that there has been a delay of 244

days in completion of construction of the project. Compensation
for breach of contract can be awarded to the innocent party only
in the event such party actually suffers a loss. Damages cannot be
recovered to unjustly enrich from an alleged breach of a contract.
Though BESCOM has admitted that the construction could not be
completed due to ROW issues and yet it goes on to levy LD.
(xxviii) The said communication has been issued in a routine manner
without taking into account the various correspondences from the
Petitioner which remains undisputed. The Petitioner after great
difficulty implemented the project and declared COD of each of
the elements before the generating station for which the
evacuation line has been commissioned. The project which was
originally intended to evacuation line for the generating station
was utilized to supply start up power to NTPC because of failure of
BESCOM to complete the line which was to be developed by it. As
a result of the delay in COD of the first unit, the implementation
schedule of other two Elements was affected. Despite all
hardships, the project was completed and vide letter dated
22.9.2016 all LTTCs including BESCOM were informed about the
commissioning of the line.
(xxix) More than two months after the COD of the entire project,
BESCOM had raised frivolous demand without giving details as (i)
how the delay was calculated (ii) whether the demand has been
taken by all LTTCs together in a meeting or by BESCOM acting
alone in its capacity as Lead LTTC and (iii) whether the decision
was taken after considering all the letters of the Petitioner. There
is no explanation as to why the letter had not been marked to all
LTTCs.
(xxx) Sections 73 and 74 of the Indian Contract Act, 1872 deal with
the issue of compensation for breach of contract. Even assuming
that the Petitioner has failed to complete the construction of the
project as per scheduled COD, even then compensation can be
claimed only if the LTTCs suffer any loss. Compensation cannot be
claimed as a matter of routine and cannot be a means to enrich a
party to a contract. The Hon'ble Supreme Court in its judgment in
Kailash Nath Associates v. DDA, (2015) 4 SCC 136 has discussed
the law in relation to damages and laid down the law on
compensation for breach of contract.
(xxxi) The right to claim LD for delay in completion of the project
cannot be seen in isolation. The TSA has to be read as a whole.
The entitlement of LDs in the event of delay in completion can be
invoked only if the LTTCs have complied with their obligations
under the TSA. The primacy reason for the delay was the non-
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availability of the inter-connection facility which is the sole

responsibility of the Respondents. In addition to Article 4.2.1, the
obligations of the LTTCs have been incorporated in various other
provisions of the TSA (Article 5.1.3).
(xxxii) The impugned communication has been issued in haste
without complying with the provisions of the TSA and is illegal
and liable to be set aside and in the interim it cannot be given
effect to and the respondents must be restrained from giving
effect to the same. As per Article 6.5.2 of the TSA, the Petitioner
is entitled to return of the Bank Guarantee within three months of
the COD of the project. DOCO of Element 2 was achieved on
19.9.2016 and therefore the BGs should have been released on or
before 19.12.2016. No prejudice will be caused to the
Respondents upon release of the BGs.
9. Based on the above submissions, the Petitioner has sought for
declaratory reliefs under the TSA dated 14.5.2013 on account of Force
Majeure events affecting the commissioning of the Project. The
Petitioner has made the following prayers:
(a) Admit the present petition:
(b) declare that the Petitioner could not have commissioned the
Project without the inter-connection facilities being made
available by the LTTCs;
(c) set aside the letter dated 5.12.2016 issued by BESCOM;
(d) declare that the Petitioner is entitled to a day to day extension
for each day's delay in non-availability of land notified by KIADB
for the second element: and
(e) direct return of the original bank guarantees furnished by the
Petitioner.
(f) pass such other and further orders/directions as the Hon'ble
Commission may deem appropriate in the facts and circumstances
of the case.
10. The Petitioner has also filed Interlocutory Application (IA No.
64/2016) praying for an ex-parte stay of operation of the
communication of the BESCOM dated 5.12.2016 in terms of its
submissions in the Petition.
11. The Petition was admitted on 29.12.2016 and notices in the
Petition and IA were served on the Respondents. Thereafter, the matter
was heard on 3.1.2017 and the Commission after hearing the parties,
directed the Petitioner to place on record all the five letters referred to
by BESCOM in its letter dated 5.12.2016. As regards the prayer of the
Petitioner in the IA 64/2016, the Commission vide ROP dated 3.1.2017
directed the Petitioner to submit a BG of Rs 4.3 crore in favour of
BESCOM (or the amount as may be calculated as LD by BESCOM for the
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delay) for a period of six months. The Commission also directed

BESCOM not to encash the BG without permission of the Commission.
Subject to this, the Commission directed BESCOM not to take any
coercive action against the Petitioner in terms of its letter dated
5.12.2016. The IA was disposed of accordingly.
12. In compliance with the above directions of the Commission, the
Petitioner vide affidavit dated 8.2.2017 has placed on record the letters
referred to by BESCOM in its letter dated 5.12.2016. The Commission
vide Record of Proceedings of the hearing dated 9.2.2017 directed the
Petitioner to furnish documentary evidence in support of the reasons for
the delay in the COD of Elements 2 and 3, as relied upon by the
Petitioner. Reply in the matter has been filed by the Respondents,
BESCOM and KSEBL and the Petitioner has filed its rejoinder to the
same.
Submissions of Respondents BESCOM
13. The Respondent No. 1, BESCOM (the Lead LTTC) vide reply
affidavit dated 21.4.2017 has objected to the submissions of the
Petitioner mainly as under:
(a) Article 4.1 of the TSA deals with TSP's obligations in
development of the project. As per Article 4.1(c), the TSP shall at
its own cost and expense observe, comply with, perform,
undertake and be responsible for entering into a Connection
Agreement with the CTU/STU (as applicable) in accordance with
the Grid Code. Connection Agreement as per the TSA shall mean
the agreement between the CTU/STU and the TSP, setting out the
terms relating to the connection of the Project to the inter-
connection facilities and use of the Inter State Transmission
System as per the provisions of the IEGC/State Grid Code, as the
case may be. Therefore, it was the responsibility and obligation of
the Petitioner to enter into Connection Agreement and undertake
the work of connection of the Project to the inter-connection
facilities.
(b) As per Regulation 2.5.3 of the IEGC Regulations, 2010, in case of
Inter-State Transmission System, Central Transmission Utility
shall be the nodal agency for Connectivity, long-term access and
medium-term open access.
(b) The Respondent was in no way responsible for the
commissioning of the project or inter-connection facilities and no
liability can be foisted on it for payment of transmission charges
for any failure of any other party under the TSA. Since the
Petitioner had failed to achieve the commissioning as on SCOD,
the Petitioner is liable to make good the losses suffered by the
BESCOM and other LTTCs on account of its failure.
(c) In the matter of signing of connection agreements by all
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generators the Commission in its order dated 21.8.2012 in

Petition No. 169/SM/2012 had clarified that the Connection
Agreement is a statutory requirement and has to be signed by all
generators without any exception. It has also been directed in the
said order that all generating companies whose generating
stations were commissioned after 1.1.2010 to sign the connection
agreements by 30.9.2012.
(d) Para E of Format Con-6 of draft Connection Agreement in
detailed procedure connected with CERC (Grant of Connectivity,
Long-term Access and Medium-term Open Access in Inter-State
Transmission and Related Matters) Regulations, 2009 states that
parties shall separately take up modalities for implementation of
the works on mutually agreed terms and conditions. Thus, Format
Con6 provides that agreement has to be entered into between
Central Transmission Utility (CTU), Applicant Company and the
inter-State Transmission Licensee. In the present case, NTPC,
Kudgi is seeking connection as applicant to the inter-State
Transmission system. The responsibilities of the three parties
would be defined in the tripartite agreement. As provided in Para
(E) of the agreement, penalties for non-completion of works in
time by one party resulting in financial losses to the other party
may be appropriately priced, as per mutual agreement, for
indemnification of each other against losses incurred in this
regard, and form part of this agreement. A perusal of the
Tripartite Agreement makes it clear that there is no role of any
LTTC in establishment of interconnection facilities required for
commissioning of the project. The Respondents should not suffer
financial implications on account of failure of the Petitioner or
others. The Respondent must be compensated for any delay in
supply of electricity as per the terms of the TSA.
(e) PCKL had addressed a letter to CEA on 21.4.2016 (a) requesting
the CTU and TSP to enter into connection Agreement, (b)
applicable transmission charges shall not be levied on the
beneficiaries; and (c) to conduct joint meeting with all LTTCs,
NTPC, PGCIL, PCKL and the Petitioner.
(f) The certificate of energization for Elements 2 and 3 from CEA was
not furnished to the LTTCs. Therefore, the submission of the
Petitioner for deemed COD cannot be accepted. In Appeal No.
123/2011 (PSPCL v. PGCIL) the Tribunal had held that the COD of
the transmission line shall be achieved when the conditions
namely (a) line has been charged successfully (b) the trial
operation has been successfully carried out and (c) it is in regular
service, are met.
(g) Article 4.2 of the TSA provides for LTTC obligations in
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implementation of the project. Article 4.2.1(b) provides for

arranging and making available the interconnection facilities to
enable the TSP to connect the project. Accordingly, as per request
of the Petitioner, BESCOM had written letter to PGCIL on
8.12.2015 and to the CEA on 3.5.2016 and 1.6.2016 requesting
them to make arrangements to provide interconnection facilities
to Element 2 and 3 respectively.
(h) The Commission vide its order dated 27.6.2016 in Petition No.
236/MP/2015 held that NTPC and PGCIL are liable to pay
transmission charges for Element 1. As per Article 5.1.3 of the
TSA, the TSP shall be responsible for obtaining all consents,
clearances and permits. The role of LTTCs is only to assist and
support the TSP in obtaining the same. Therefore, it was the
responsibility of the Petitioner to clear issues pertaining to ROW.
In so far as the role of LTTCs is concerned, BESCOM vide letter
dated 8.12.2015 requested the CEO, KIADB to sort out ROW
issues so that the transmission line could be completed well in
time. As regards the non-availability of inter-connection facilities,
BESCOM had written to PGCIL to provide interconnection facility
and the delay on such account cannot be attributed to the
Respondent/LTTC.
(i) As per Connection Agreement as detailed in procedures of CTU
under Regulation 27(1) of CERC (Grant of Connectivity, Long
Term Access and Medium-Term Open Access in Inter-State
Transmission and Related Matters) Regulations, 2009, the
concerned parties (i.e CTU, Applicant and Inter-state
Transmission Licensee) shall separately take up modalities for
implementation of the works on mutually agreed terms and
conditions. The scope of works, time schedule for completion of
works including the time lines for the various milestones to be
reached for completion of works (PERT chart) shall form an
appendix to Connection agreement and shall form the basis for
evaluating if the works by the parties is being executed in time.
Penalties for non-completion of works in time by one party
resulting in financial losses to the other party may be
appropriately priced as per mutual agreement for indemnification
of each other against losses incurred in this regard, and form a
part of this agreement.
(j) The submissions of the Petitioner as regards law and order
problems are self-serving. The Petitioner has not substantiated or
corroborated its statements with any supporting documents. The
statement that correspondence between BESCOM and the
Petitioner is produced as Annexure-J is false. The letters produced
are not addressed to Respondent. It was the responsibility and
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obligation of the Petitioner to ensure that the work progressed in a

smooth manner which the Petitioner failed to do.
(k) On receipt of letter of the Petitioner, the Respondent issued letter
dated 8.12.2015 to KIADB requesting them to sort out ROW
issues with a view to complete the transmission line in time.
Citing the reason of ROW issues, the Petitioner sought for
extension of time which was rejected by the Respondent stating
that he should approach this Commission to seek appropriate
reliefs. If the delay was caused due to reasons beyond the control
of the Petitioner, then, in such an event, the Petitioner should
have invoked the appropriate clause of the agreement which it
has not done.
(l) The contention of ‘force majeure’ raised by the Petitioner cannot
be accepted. Article 11.3 of the TSA lists out the events which are
to be treated as force majeure events. A perusal of the same
indicates that ROW issues do not constitute force majeure event
under the terms of the TSA. Further, Article 11.5 of the TSA
provides that the affected party shall give notice to the other
party of any event of force majeure as soon as reasonably
practicable, but not later than 7 days after the date on which such
party knew or should reasonably have known of the
commencement of the event of force majeure. In this case, the
Petitioner has not given the Respondent, notice of any force
majeure event till date, much less within 7 days as stipulated.
Such notice, as per the TSA, shall be a pre-condition to the
affected party's entitlement to claim relief under the TSA. The
terms of invocation of force majeure clause are to be complied
with strictly, which the Petitioner has failed to do. In view of the
same, the Respondent requested the Petitioner to approach this
Commission for appropriate relief.
(m) As the Petitioner had failed to achieve commissioning of the
project within the time stipulated, the Respondent issued letter
dated 5.12.2016 claiming LD. The action of the Respondent is in
accordance with the terms of the TSA entered into with the
Petitioner. In order to decide COD, the Petitioner had to submit
necessary approval letters from CEA which the Petitioner had
failed to do. The submissions of Petitioner that the delay in
declaration of COD of Element 1 affected the COD of the other two
elements are not acceptable. The Petitioner was supposed to
complete the project as per Schedule 3 of the TSA and the
Petitioner was aware of the completion schedule of the project at
the time of signing the TSA. The contention of the Petitioner that
the project, which was originally intended for the purpose of
evacuation for the generating station was utilized to supply start
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up power to NTPC because of failure of BESCOM to complete the

line, is untenable since the Respondent is a distribution licensee.
It was envisaged by NTPC that KPTCL, which is the transmission
licensee in the State of Karnataka should provide startup power.
As this was delayed, the Petitioner agreed to provide startup
power from EIement 1 of the project. This is borne out from the
MoM dated 29.5.2015 (meeting held on 24.4.2015) to review the
progress of construction of transmission schemes wherein, the
representative of the Petitioner suggested that due to delay in
construction of 220kV line by KPTCL, their 400kV line Kudgi-
Narendra (new) may be utilized for drawl of startup power.
(n) The Respondent has in accordance with Article 6.4 of the TSA,
addressed letters to the Petitioner levying LD for delay in
achieving COD of the project. As per Schedule 8 of the TSA, it is
the right and obligation of the lead LTTC to communicate with the
TSP on imposition of LD and as per Article 6.4 of the TSA, levy of
LD has been communicated to the Petitioner. The letters written
by the Petitioner do not supersede the terms of the contract and
therefore the contention regarding various letters of the Petitioner
is liable to be rejected.
(o) The averment that the LTTC can claim damages only if it has
suffered a loss is untenable. The LTTCs and in turn its consumers
have suffered immense loss due to the failure of the Petitioner to
achieve COD of the project within the stipulated time as per the
terms of TSA. If the transmission line was commissioned as per
Schedule 3 of the TSA, the beneficiaries would have had the
option of availability of the corridor for purchase of power from the
Western Region, where the power is surplus. Due to the failure of
the Petitioner to achieve COD as per the terms of the TSA, the
beneficiaries have lost this opportunity. Thus, the action of the
Respondent is strictly in accordance with the terms of the contract
and provisions of law.
(p) As per Article 5.1.2 of the TSA, the TSP shall not be relieved from
any of its obligations under the agreement or be entitled to any
extension of time by reason of the unsuitability of the site or
transmission line route(s) for whatever reasons. The TSP shall also
not be entitled to any financial compensation in this regard. It is
the responsibility of the TSP to obtain all consents, clearances and
permits and the role of LTTCs is only to assist the TSP by
providing letters of recommendation, which has been done by the
Respondent.
(q) The Petitioner is entitled to return of BG only if it achieves COD
within the timeframe stipulated in the contract. In this case, there
is considerable delay by the Petitioner in achieving COD, which
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has caused substantial loss to the LTTCs, which the Respondent is

entitled to recover. Moreover, to decide COD, the Petitioner had to
submit necessary approval letters from CEA and as per directions
of this Commission.
Accordingly, the Respondent, BESCOM has submitted that the relief
sought for by the Petitioner is not in accordance with the terms of the
TSA entered into with the LTTCs or the orders of the Commission or the
law laid down by the Supreme Court and therefore, the Petition is liable
to be dismissed.
KSEBL
14. The Respondent No. 7, Kerala State Electricity Board Limited
(KSEBL) vide its reply affidavit dated 28.1.2017 has mainly submitted
the following:
(a) Any delay in commissioning new transmission lines and
generating stations will adversely affect the power procurement
plan of the beneficiaries which they plan in accordance with the
scheduled commissioning dates of the projects. So it is the
responsibility of the developer of the project to complete the
project within the scheduled COD. Hence the developer of the
project is liable to pay liquidated damages to the beneficiaries of
the project for delay in achieving the scheduled COD as specified
in the TSA entered into between the developer and beneficiaries.
(b) As per Article 6.4.1 of the TSA signed between the Petitioner and
the LTTCs, the Petitioner is liable to pay liquidated damages to
long term customers for not achieving the scheduled COD.
Further, Article 6.5.1 of the TSA provides that if the TSP fails to
achieve COD of any of the elements on their respective scheduled
COD specified in this Agreement, subject to conditions mentioned
in Article 4.4, the LTTCs shall have the right to encash the
Contract Performance Guarantee (CPG) and appropriate in their
favour as LD, an amount specified in Article 6.4.1, without
prejudice to the other rights of the LTTCs under this Agreement.
The Petitioner is liable to provide LD to all LTTCs in proportion to
their respective allocation for the delay in commissioning of the
project.
(c) It is not the sole responsibility of the LTTCs to make available the
interconnection facilities. The Petitioner has failed to comply with
the obligations of the TSP as per Article 4.1(e) & (g) of the TSA to
enable the LTTCs to monitor and co-ordinate the development of
the project matching with the interconnection facilities.
(d) The Petitioner has not provided progress reports on a monthly
basis to the LTTCs. Further occurrence of events such as refusal of
KIADB to approve route of Element 2 through their land, law and
order issues etc., were not brought to the notice of the LTTCs in
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time. This shows the failure on the part of the Petitioner in

performing its obligations as prescribed in the TSA.
(e) The allegation of the Petitioner that the delay in making available
the interconnection facilities (made available to it only on
6.9.2016) resulted in the uncontrollable delay of 9 months is not
true. It is clear from the Petitioner's letter dated 27.5.2016
addressed to the Chief Secretary, Government of Karnataka that
10% of the works of the transmission system was still pending at
KIADB area and some other locations due to compensation issues
etc. Thus, the Petitioner could not have commissioned the project
earlier even if the interconnection facilities were made available
and hence the allegation of the Petitioner is baseless.
(f) As per Petitioner's letter dated 24.11.2015 addressed to BESCOM,
the Petitioner had submitted the first proposal to KIADB
authorities on 26.5.2015 which was rejected on 1.6.2015 citing
reasons that the proposed route is passing through the plots
already allotted by KIADB. Based on this revised proposal was
submitted by the petitioner on 27.7.2015 to KIADB.
(g) The lead LTTC, BESCOM was informed of the matter only on
24.11.2015, i.e 6 months after the rejection of the proposal by
KIADB. The Petitioner had sought the intervention of BESCOM to
advise KIADB to grant approval at the earliest for commencement
of construction work. The Petitioner's submission that BESCOM
intervened in the matter to resolve the issues show that the lead
LTTC had acted immediately when informed about the matter.
Hence, it is clear that the laxity on the part of the Petitioner in
timely intimating the LTTCs about the issues affected the progress
of the project resulted in the undue delay in completing the
works. Similarly the law and order problems were also not
informed to the LTTCs in time. The Commission may not consider
the request of the Petitioner to consider the reasons for delay as
‘Force Majeure’ as the Petitioner has failed to comply with the
obligations under the TSA.
(h) Force majeure means any event or circumstances or combination
of events and circumstances which wholly or partly prevents or
unavoidably delays an affected party in the performance of its
obligations under the TSA. In the present case, the delay in
commissioning the line within the scheduled COD could have been
avoided if the Petitioner had taken reasonable efforts to bring to
the notice of the LTTCs the occurrence of such events in time and
provided on timely basis relevant information with regard to the
progress of the Project. Hence, the reason for delay of more than
8 months was not uncontrollable and hence cannot be considered
as Force Majeure.
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(i) The Petitioner has not issued notice to the LTTCs as provided
under Article 11.5 of TSA. The notification of the Force Majeure
event is a pre-condition to the affected party's entitlement to
claim relief under TSA. Relief to the Petitioner under Force
Majeure is subject to the condition as prescribed in Article 11.5.1
of the TSA. Hence, the primary requirement of issue of notice
under this clause has not been complied with in the present case
and the Petitioner is not entitled to claim any relief under the
Force Majeure Clause of the TSA.
(j) Further, as per Article 11.6 of the TSA, the affected party is
expected to use its reasonable efforts to mitigate the effect of
such Force Majeure event. Hence, the Petitioner was expected to
use its reasonable efforts to follow up with the LTTCs enabling
them to intervene to assist the Petitioner to resolve the issues
affecting the progress of the project. The Petitioner has failed to
perform its obligations in the instant case.
(k) It can be concluded that the delay occurred due to negligence or
omissions on the part of the Petitioner in bringing to the notice of
the LTTCs of the occurrence of the events as prescribed in the TSA
and hence cannot be considered as Force Majeure events. The
Petitioner is liable to pay LD to the LTTCs for the delay.
Accordingly, KSEBL has prayed that the Petition may be dismissed
and the LTTCs of the project including KSEBL, may be allowed to claim
LD from the Petitioner in proportion to their respective allocations.
Rejoinder of Petitioner
15. The Petitioner vide its rejoinder affidavit dated 2.1.2018 has
mainly reiterated its submissions made in the Petition. It has however
submitted that entering into connection agreement is not relevant for
adjudication of the issues in the present Petition. Moreover, there is no
privity of contract between the Petitioner and PGCIL in connection with
making available the inter-connection facilities and merely because the
third party was required to develop the facility cannot be a ground for
absolving the Respondents of their liability under the TSA. Referring to
the judgment of the Hon'ble Supreme Court in Badat v. East India
Trading Co (AIR 1964 SC 538), the Petitioner has submitted that
specific pleadings have to be given specific reply and bald denial of
pleadings amounts to admission. The Petitioner has reiterated that
force majeure under the TSA is an inclusive definition including all such
evens and circumstances and merely because any head is not
mentioned expressly as an example of force majeure event, cannot be
interpreted to mean that ROW issue cannot be a force majeure event.
As regards notice to the other party with regard to the Force Majeure
event in terms of Article 11.5 of the TSA, the Petitioner has clarified
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that it could not send letter within 7 days as the same was not
reasonably practical, but wrote to the Respondent, BESCOM as soon as
it was in a position to do so. With regards to breach of contract and
claim for damages, the Petitioner has referred to Sections 73 and 74 of
the Indian Contract Act and the various judgments of the Hon'ble
Supreme Court and submitted that LD would not be payable till the
time actual loss is proved by the party claiming breach of contract.
Even if actual loss is impossible of being proved, then also loss must be
established and proof of actual quantification may be dispensed with.
Accordingly, the Petitioner has contended that the Respondents have
failed to demonstrate any prejudice caused to them as a result of the
delay and hence the Petition may be allowed and the BGs may be
immediately released and the LTTCs may be directed to bear the costs
of maintaining the BGs after the date of their expiry in terms of the
TSA.
16. Thereafter, the matter was heard on 3.5.2018 and the
Commission vide ROP of the directed the listing of this Petition along
with Petition No. 210/MP/2017 filed by the Petitioner (for revision of the
quoted transmission tariff payable to it in terms of the Transmission
Services Agreement (TSA) for various events occurring after the Bid
due date). Subsequently, this Petition was heard on 25.7.2018 and the
Commission after directing the parties to file their written submissions,
reserved its order in the Petition. In terms of the above directions,
BESCOM vide affidavit dated 10.8.2018 and the Petitioner by affidavit
dated 23.8.2018have filed their written submissions.
Written submissions of BESCOM
17. BESCOM in its written submissions dated 10.8.2018 has mainly
reiterated the submissions made in its reply. It has however submitted
that the Petitioner has failed to execute the Connection Agreement as
per Article 4.1(c) of the TSA and in terms of the CERC Connectivity
Regulations, 2009 and the detailed procedure thereof. It has pointed
out that in terms of Articles 4.1(a) and 5.1.3 of the TSA, it was the
responsibility of the Petitioner to carry out the survey and finalize the
route and pay compensation to land owners and clear the issues
pertaining to ROW. The Respondent has further submitted that the
Petitioner for the first time had sought approval of KIADB to put up line
and towers with regard to Element 2 in KIADBs land in Tumkur District,
Karnataka. After KIADB vide letter dated 1.6.2015 proposed alternate
route, the Petitioner had submitted revised route plan with KIADB on
27.7.2015, 9.9.2015 and 5.11.2015. Thereafter, KIADB directed the
Petitioner to stop erecting towers and drawing lines on its land as the
Petitioner had not paid compensation towards use of the land. Thus, the
delay has been caused due to the Petitioner not adhering to the
directions of KIADB and due to frequent changes in the alignment
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suggested by the Petitioner. The entire problem is due to the Petitioner

not conducting survey and not approaching KIADB in good time. The
Respondent has submitted that the Petitioner is entitled to extension of
scheduled COD in cases of default by the Respondent and force
majeure events and since the delay is attributable to the Petitioner, the
Petitioner is not entitled for extension of SCOD. The Respondent while
stating that no reliance can be made on the letters enclosed by the
Petitioner in Annexure-J with regard to law & order problems in Tumkur
etc., as the same is unauthenticated, it has submitted that even if
these letters are relied upon, it would reveal that the Petitioner had
approached the authorities after the SCOD. Referring to the judgment
of the Hon'ble Supreme Court in Construction and Design Services v.
DDA (2015 14 SCC 263), the Respondent has submitted that in cases
of public utility projects, it is presumed that delay in execution of
project has resulted in loss. The Respondent being a public limited
company, the Petitioner having executed the project belatedly, is liable
to pay LD as per provisions of the TSA. Accordingly, the Respondent
has prayed that the Petition may be dismissed.
Written submissions of Petitioner
18. The Petitioner in its written submissions dated 23.8.2018 has
reiterated its submissions made in the Petition and in its rejoinder. It
has however clarified that in accordance with Article 6 of the TSA, the
TSP is required to give advance notice of not less than 60 days of the
date on which it proposes to connect any element with the
interconnection facilities and hence it is obvious that such facility must
be ready and made available to the TSP much earlier to enable to plan
its construction activities. In terms of Article 6.1.2 of the TSA, any
extension of date of connection due to any reason including failure to
arrange for interconnection facilities leads to day to day deferment of
SCOD. As regards law & order situation, the Petitioner has stated that
the High Court of Karnataka, Dharwad Bench and the District Munsif
Court had issued ex-parte interim injunction orders against the
Petitioner based on petitions filed by landowners and as a result, the
Petitioner was refrained from carrying out any work at respective sites.
The Petitioner has further stated that the delay in grant of permission
by KIADB, an instrumentality of the State, is for reasons beyond the
control of the Petitioner and this constitutes a ‘force majeure’ event.
The Petitioner has stated that there was no power flow even when the
lines were ready and under commercial operation and hence there is no
question of any loss suffered by the LTTCs. Accordingly, the Petitioner
has prayed that the Petition may be allowed and the reliefs prayed for
may be granted.
19. Since order in the Petition could not be passed prior to one
Member of the Commission who heard the matter demitting office, the
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Petition was listed for hearing on 23.10.2018. During the hearing, the
learned counsels for the Petitioner and the Respondents submitted that
since the Commission has already heard the matter and issued detailed
ROP, no further arguments were required and order may be passed
based on the submissions of the parties and the documents available
on record. Accordingly, the Commission reserved its order in the
Petition.
Analysis and Decision
20. Based on the submissions of the parties and the documents
available on record, the following issues emerge for consideration:
A. Issue No. 1: Whether the provisions of the TSA dated 14.5.2013
with regard to notice has been complied with?
B. Issue No. 2: Whether the claims of the Petitioner under Force
Majeure events are admissible?
C. Issue No. 3: What reliefs should be granted to the Petitioner in
the light of the answer to the above issues?
Issue No. 1: Whether the provisions of the TSA dated 14.5.2013
with regard to notice has been complied with?
21. The Petitioner has claimed relief under Article 11 (Force Majeure)
of the TSA. Article 11.5.1 of the TSA provides as under:
“11.5 Notification of Force Majeure Event
11.5.1 The Affected Party shall give notice to the other Party of
any event of Force Majeure as soon as reasonably practicable, but
not later than seven (7) days after the date on which such Party
knew or should reasonably have known of the commencement of the
event of Force Majeure. If an event of Force Majeure results in a
breakdown of communications rendering it unreasonable to give
notice within the applicable time limit specified herein, then the
Party claiming Force Majeure shall give such notice as soon as
reasonably practicable after reinstatement of communications, but
not later than one (1) day after such reinstatement. Provided that
such notice shall be a pre-condition to the Affected Party's
entitlement to claim relief under this Agreement. Such notice shall
include full particulars of the event of Force Majeure, its effects on
the Party claiming relief and the remedial measures proposed. The
Affected Party shall give the other Party regular reports on the
progress of those remedial measures and such other information as
the other Party may reasonably request about the Force Majeure.
11.5.2 The Affected Party shall give notice to the other Party of (i)
the cessation of the relevant event of Force Majeure; and (ii) the
cessation of the effects of such event of Force Majeure on the
performance of its rights or obligations under this Agreement, as
soon as practicable after becoming aware of each of these
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cessations.”
22. Under Article 11.5.1 of the TSA, an affected party shall give
notice to the other party of any event of Force Majeure as soon as
reasonably practicable, but not later than seven days after the date on
which the party knew or should have reasonably known of the
commencement of the event of force majeure. It further provides that
such notice shall be a pre-condition to the affected party's entitlement
to claim relief under the TSA.
23. The Petitioner vide its letter dated 16.11.2015 had informed
BESCOM i.e the Lead LTTC and all other LTTCs about the non-
availability of the interconnection facilities required for completion of
the Project to be made ready by PGCIL. Thereafter, the Petitioner, by
letter dated 24.11.2015 intimated BESCOM and all other LTTCs about
the refusal of KIADB to grant approval for the original alignment of
Element 2 and to advise KIADB authorities to issue approval for
commencement of construction. Further, the Petitioner by letter dated
21.12.2015 referred to the above said letters and intimated the
BESCOM and other LTTCs about the problems faced by the petitioner in
completion of Elements 2 and 3 as a result of nonavailability of KIADB
land and requested to extend the SCOD of Elements 2 and 3 on ‘day to
day’ basis in terms of Article 6.1.2 of the TSA due to non-availability of
inter-connection facilities to match the SCOD of these elements and to
extend the SCOD of Element 2 by 180 days due to force majeure
condition due to delay in approval by KIADB for Element 2 passing
through KIADB land as per Article 4.4.2 of the TSA. In response,
BESCOM vide separate letters dated 8.12.2015 had requested PGCIL to
provide interconnection facilities for Elements 2 & 3 and had also
requested the CEO, KIADB to sort out the Right of Way issues, so that
the Petitioner can achieve COD of both the elements as per schedule.
Subsequently, BESCOM vide letter dated 30.1.2016 requested the
Petitioner to (i) approach the Central Commission for approval of force
majeure condition and for extension of COD and (ii) to approach the
CEA for conduct of a joint meeting of the Petitioner with NTPC, PGCIL
and all LTTCs to discuss the Project status, Right of Way issues and
extension of the SCOD. Thereafter, BESCOM vide its letter dated
5.12.2016 had requested the Petitioner to pay LD to all the LTTCs in
proportion to their share as per TSA considering a delay of 244 days
from the scheduled COD of Elements 2 and 3 of 31.12.2015. Based on
the above, the Petitioner has approached the Commission by filing the
present Petition with the prayers as aforesaid. In our view, the
Petitioner has complied with the requirement of prior notice to the
LTTCs regarding the occurrence of the force majeure events leading to
the delay in completion of the elements 2 and 3, before approaching
this Commission through this Petition.
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Issue No. 2: Whether the claims of the Petitioner under Force

Majeure events are admissible?
24. The provisions of the TSA dated 14.5.2013 with regard to ‘Force
Majeure’ are extracted hereunder:
“11. FORCE MAJEURE
11.1 Definitions
11.1.1 The following terms shall have the meanings given
hereunder.
11.2 Affected Party
11.2.1 An Affected Party means any of the Long Term
Transmission Customers or the TSP whose performance has been
affected by an event of Force Majeure.
11.2.2 An event of Force Majeure affecting the CTU/STU, or any
agent of the Long Term Transmission Customers, which has affected
the Interconnection Facilities, shall be deemed to be an event of
Force Majeure affecting the Long Term Transmission Customers.
11.2.3 Any event of Force Majeure shall be deemed to be an event
of Force Majeure affecting the TSP only if the Force Majeure event
affects and results in, late delivery of machinery and equipment for
the Project or construction, completion, commissioning of the Project
by Scheduled COD and/or operation thereafter;
11.3 Force Majeure
A “Force Majeure” means any event or circumstance or
combination of events and circumstances including those stated
below that wholly or partly prevents or unavoidably delays an
Affected Party in the performance of its obligations under this
Agreement, but only if and to the extent that such events or
circumstances are
not within the reasonable control, directly or indirectly, of the
Affected Party and could not have been avoided if the Affected Party
had taken reasonable care or complied with Prudent Utility Practices:
(a) Natural Force Majeure Events: Act of God, including, but not
limited to drought, fire and explosion (to the extent originating
from a source external to the Site), earthquake, volcanic
eruption, landslide, flood, cyclone, typhoon, tornado, or
exceptionally adverse weather conditions which are in excess of
the statistical measures for the last hundred (100) years,
(b) Non-Natural Force Majeure Events:
i. Direct Non-Natural Force Majeure Events:
• Nationalization or compulsory acquisition by any Indian
Governmental Instrumentality of any material assets or rights
of the TSP; or
• the unlawful, unreasonable or discriminatory revocation of, or
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refusal to renew, any Consents, Clearances and Permits

required by the TSP to perform their obligations under the RFP
Project Documents or any unlawful, unreasonable or
discriminatory refusal to grant any other Consents, Clearances
and Permits required for the development/operation of the
Project, provided that a Competent Court of Law declares the
revocation or refusal to be unlawful, unreasonable and
discriminatory and strikes the same down; or
• any other unlawful, unreasonable or discriminatory action on the
part of an Indian Governmental Instrumentality which is
directed against the Project, provided that a Competent Court
of Law declares the action to be unlawful, unreasonable and
discriminatory and strikes the same down.
ii. Indirect Non - Natural Force Majeure Events.
• act of war (whether declared or undeclared), invasion, armed
conflict or act of foreign enemy, blockade, embargo, revolution,
riot, insurrection, terrorist or military action; or
• radioactive contamination or ionising radiation originating from a
source in India or resulting from any other Indirect Non Natural
Force Majeure Event mentioned above, excluding
circumstances where the source or cause of contamination or
radiation is brought or has been brought into or near the Site
by the Affected Party or those employed or engaged by the
Affected Party; or
• industry wide strikes and labour disturbances, having a
nationwide impact in India.
11.4 Force Majeure Exclusions
11.4.1 Force Majeure shall not include (i) any event or
circumstance which is within the reasonable control of the Parties
and (ii) the following conditions, except to the extent that they are
consequences of an event of Force Majeure:
(a) Unavailability, late delivery, or changes in cost of the
machinery, equipment, materials, spare parts etc. for the
Project;
(b) Delay in the performance of any contractors or their agents;
(c) Non-performance resulting from normal wear and tear
typically experienced in transmission materials and equipment;
(d) Strikes or labour disturbance at the facilities of the Affected
Party;
(e) Insufficiency of finances or funds or the agreement becoming
onerous to perform; and
(f) Non-performance caused by, or connected with, the Affected
Party ‘s:
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i. negligent or intentional acts, errors or omissions;

ii. failure to comply with an Indian Law; or
iii. breach of, or default under this agreement or any Project
Documents.
11.6 Duty to perform and duty to mitigate
To the extent not prevented by a Force Majeure Event, the
Affected Party shall continue to perform its obligations as provided in
this Agreement. The Affected Party shall use its reasonable efforts to
mitigate the effect of any event of Force Majeure as soon as
practicable.
11.7 Available Relief for a Force Majeure Event Subject to this
Article 11
(a) No Party shall be in breach of its obligations pursuant to this
Agreement except to the extent TSA for Selection of
Transmission Service Provider for that the performance of its
obligations was prevented, hindered or delayed due to a Force
Majeure Event;
(b) Every Party shall be entitled to claim relief for a Force Majeure
Event affecting its performance in relation to its obligations
under this Agreement.
(c) For the avoidance of doubt, it is clarified that the computation
of Availability of the Element(s) under outage due to Force
Majeure Event, as per Article 11.3 affecting the TSP shall be as
per Central Electricity Regulatory Commission (Terms &
Conditions for Determination of Tariff) Regulations 2009 and
related amendments from time to time, as applicable seven (7)
days prior to the Bid Deadline. For the event(s) for which the
Element(s)is/are deemed to be available as per Central
Electricity Regulatory Commission (Terms and Conditions)
Regulations for Order.
(d) For so long as the TSP is claiming relief due to any Force
Majeure Event under this Agreement, the Lead Long Term
Transmission Customer may, from time to time on one (1) day
notice, inspect the Project and the TSP shall provide the Lead
Long Term Transmission Customer's personnel with access to
the Project to carry out such inspections, subject to the Lead
Long Term Transmission Customer's personnel complying with
all reasonable safety precautions and standards.”
25. “Force Majeure” has been defined as any event or circumstance
or combination of events and circumstances that wholly or partly
prevents or unavoidably delays an affected party in the performance of
its obligations under the TSA, but only if and to the extent that such
events or circumstances are not within the reasonable control, directly
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or indirectly, of the affected party and could not have been avoided if
the affected party had taken reasonable care or complied with Prudent
Utility Practices. Force Majeure also includes Natural Force Majeure
under Force Majeure Exclusions unless they are results of force majeure
events. Further, the definition of force majeure provides that the
affected party is entitled to the protection of force majeure to the
extent the events or circumstances are not within the reasonable
control of the affected party.
In the light of the provisions of force majeure, the claims of the
Petitioner have been examined. The Petitioner has submitted that the
construction of Elements 2 and 3 were delayed for the following reasons
which according to it, were beyond its control:
(A) Non-availability of Interconnection facility for Elements 2 and 3;
(B) Right of Way issues at various villages comprised in Bellari
Bijapur, Chitradurga, Koppak, Tumkur and Ramanagara District;
(C) Law and Order issues at Bijapur. Ballari, Tumkur and
Ramanagara Districts.
(D) Delay in obtaining Right of Way from the landowners for lands
claimed by KIADB as notified land for acquisition
A. Non-availability of Interconnection facilities for Elements 2 and 3
26. The Petitioner has submitted that Elements 2 and 3 were
required to be completed by 31.12.2015 (about 10 months after the
original completion date of Element 1). The Petitioner has also
submitted that in addition to the delay in declaration of COD and non-
payment of tariff for Element 1 and the impact it had on the
construction schedule of Elements 2 and 3, the non-availability of
Interconnection facilities for Element 2 and 3 had forced the delay in
declaration of COD of the Elements 2 and 3 and and hence not
attributable to the Petitioner. The Petitioner has further submitted that
it had informed BESCOM, the Lead LTTC vide letter dated 16.11.2015
about the non-availability of interconnection facilities being made
available by PGCIL which was required for completion of Elements 2
and 3. It has stated that due to non-availability of interconnection
facilities, inspection by CEA was delayed and the decision for charging
765 kV line on 400 kV led to indecisiveness as to the bay on which the
lines were to be terminated and these impacted the COD of the
elements. The Petitioner has also stated that as per provisions of Article
4.2 of the TSA, making interconnection facility is the sole responsibility
of the LTTCs and hence the delay due to default of LTTC cannot be
attributable to the Petitioner. The Petitioner has further stated that the
interconnection facilities were made available only on 6.9.2016 and
therefore there was an uncontrollable delay of 9 months in the
declaration of COD the elements.
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27. The Respondent, BESCOM has submitted that in terms of Article

4.1(c) of the TSA, it was the responsibility and obligation of the
Petitioner to enter into connection agreement and undertake the work
of connection of the Project to the inter-connection facilities. The
Respondent has also submitted that it was in no way responsible for
commissioning the Project or interconnection facilities and no liability
can be foisted on it for payment of transmission charges for any failure
of any other party under the TSA. It has further submitted that as per
request of the Petitioner, the Respondent has written letter to PGCIL on
8.12.2015 and to CEA on 3.5.2016 & 1.6.2016 requesting them to
make arrangements to provide interconnection facilities to Element 2
and 3. Since the Petitioner has failed to achieve commissioning as on
SCOD, the Petitioner is liable to make good the losses suffered by the
Respondent and other LTTCs on account of its failure.
28. The Respondent, KSEBL submitted that it is not the sole
responsibility of LTTCs to make available the interconnection facilities.
It has also submitted that the Petitioner has failed to comply with the
obligations of the TSP as per Article 4.1(e) & (g) of the TSA to enable
the LTTCs to monitor and co-ordinate the development of the Project
matching with the interconnection facilities. The Respondent has
submitted that 10% of the works of the transmission system was still
pending at KIADB area and some other locations due to compensation
issues and hence the Petitioner could not have commissioned the
Project earlier even if the interconnection facilities were made available.
29. We have considered the submissions of the Petitioner and the
Respondents. The Project was proposed to be developed as evacuation
facility for NTPCs Kudgi TPS (3 × 800 MW Phase-I) and involves the
development of the following transmission elements:
Sl Elements Scope of work Construction period
No
1 Element - 2 Nos. 400 kV Double 18 months from the
1 Circuit Transmission Line- effective date
Kudgi TPS to Narendra
(New)
2 Element - 765 kV D/C TL Narendra 28 months from the
2 (New) to Madhugiri effective date
3 Element - 400 kV D/C TL Madhugiri 28 months from the
3 to Bidadi effective date
30. The details of the inter-connection facilities required to be
developed prior to the commissioning of the elements of the
transmission Project are as under:
Sl Name of the Agency Interconnection facility
No
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1 NTPC Kudgi Power Plant (3 400 kV Bays allotted to KTL for

× 800MW) connecting Element 1
2 Power Grid Corporation of Narendra (New) 765/400 kV
India Limited (“PGCIL”) Pooling station-Respective bays
allotted to KTL for connecting
Element 1
3 PGCIL 1 no. Multi Circuit Tower for
terminating circuits (second 400
kV D/C line) of Element 1
Elements Name of the Interconnection facility
Agency
Element- PGCIL Narendra (New) 765/400 kV Pooling
2 Station-Respective bays allotted to
KTL for connecting Element 2
Element- Madhugiri 765/400 kV Pooling
2 Station- Respective bays allotted to
KTL for connecting Element 2
Element- PGCIL Madhugiri 765/400 kV Pooling
3 Station- Respective bays allotted to
KTL for connecting Element 3
Element- Bidadi 400 kV Pooling Station-
3 Respective bays allotted to KTL for
connecting Element 3
31. Article 2 of the TSA defines the Effective Date as under:
“2.1 Effective Date
This agreement shall be effective from later of the dates of the
following events:
(a) The agreement is executed and delivered by the Parties; and
(b) The selected Bidder has acquired for the Acquisition Price one
hundred percent (100%) of the equity shareholding of REC
Transmission Projects Company Ltd. in Kudgi Transmission
Limited along with all its related assets and liabilities as per the
provisions of the Share Purchase Agreement and
(c) The Selected Bidder on behalf of the TSP has provided the
Contract Performance Guarantee, as per terms of Article 3.1 of
this agreement.
32. As per the said provisions, the TSA would be effective from the
date of execution of TSA, successful bidder acquired the TSP as its fully
owned subsidiary and successful bidder provided Contract Performance
Guarantee whichever is later. It is noted that the TSA was entered into
between the parties on 14.5.2013. LTIDPL acquired KTL as its fully
owned subsidiary on 30.8.2013. Therefore, the effective date for
implementation of the project is 30.8.2013.
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33. Scheduled COD has been defined as under:

“Scheduled COD” in relation to an Element(s) shall mean the date
(s) as mentioned in Schedule 3 as against such Element(s) and in
relation to the Project, shall mean the date as mentioned in Schedule
3 as against such Project, subject to the provisions of Article 4.4 of
this Agreement, or such date as may be mutually agreed among the
Parties.”
34. Scheduled COD has been given in Schedule 3 of the TSA with
overall SCOD as 28 months from the effective date. As per schedule 3
of the TSA, the first element of the project was contemplated to be
completed within a period of 18 months and other two elements
(Elements 2 and 3) were contemplated to be completed within a period
of 28 months. Therefore, the Scheduled COD of the project was
28.2.2015 and 31.12.2015. The Petitioner completed the entire scope
of work for the first element on 27.3.2015 and due to non-availability of
inter-connection facility required to be developed by NTPC and PGCIL, it
could not test and charge the same. However, based on CEA letter
dated 28.7.2015, the Petitioner had declared deemed COD of Element 1
from 4.8.2015 in terms of the provisions of the Article 6.2.2 of the TSA
i.e., 7 days after the energisation of the transmission lines. Accordingly,
the Commission by order dated 27.6.2016 in Petition No. 236/MP/2015
approved the deemed COD of Element 1 as 4.8.2015. Though the
Petitioner in this Petition has submitted that the delay in declaration of
COD of Element 1 had impacted the delay in declaration of COD of
Elements 2 and 3, no justification has been furnished by the Petitioner
in support of the same.
35. Article 4.1 and 4.2 of the TSA provides as under:
“Article 4 Development of the Project
4.1 TSP's obligations in development of the project:
Subject to the terms and conditions of this Agreement, the TSP at
its own cost and expense shall observe, comply with perform,
undertake and be responsible:
a. for procuring and maintain in full force and effect all Consents,
Clearances and permits, required in accordance with Law for
development of the Project:
b. for financing, constructing, owning and commissioning each of
the Element of the Project for the scope of work set out in
Schedule 2 of this Agreement in accordance with:
i. the Grid Code, the grid connectivity standards applicable to the
Transmission Line and the sub-station as per the Central
Electricity Authority (Technical for Connectivity to the Grid)
Regulations, 2007, Central Electricity Authority (Technical
Standards for Constructions for Construction of Electrical Plants
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and Electric Lines) Regulations, 2010, Central Electricity

Authority (Grid Standards) Regulations, 2010 and as amended
from time to time and following Regulations as and when
notified by CEA:
• Central Electricity Authority (Safety requirements for
construction, operation and maintenance of electrical plants
and electric lines) Regulations, 2008
• Central Electricity Authority (Measures relating to Safety and
Electric Supply) Regulations, 2007
ii. Prudent Utility Practices and the Law: xxxxxxx
c. for entering into a Connection Agreement with the CTU/STU (as
applicable) in accordance with the Grid Code.
xxxxxx
e. to co-ordinate and liaise with concerned agencies and provide
on a timely basis relevant information with regard to the
specifications of the project that may be required for
interconnecting the project with the Interconnection Facilities;
g. to provide to the Long Term Transmission Customers with a
copy to CEA, on a monthly basis, progress reports with regard
to the Project and the execution (in accordance with Agreed
Form) to enable the Long Term Transmission Customers/CEA to
monitor and co-ordinate the development of the Project
matching with the Interconnection Facilities.
h. to comply with all its obligations undertaken in its Agreement.
4.2 Long Term Transmission Customers' obligations in
implementation of the Project:
4.2.1 Subject to the terms and conditions of this Agreement, Long
Term Transmission Customers, at their own cost and expense,
undertake to be responsible:
a. for assisting and supporting the TSP in obtaining the Consents,
Clearances and Permits required for the Project and in
obtaining any applicable concessions for the Project, by
providing letters of recommendation to the concerned Indian
Governmental Instrumentality, as may be requested by the TSP
from time to time;
b. for arranging and making available the Interconnection
Facilities to enable the TSP to connect the Project;
c. for complying with all their obligations under this Agreement,
and xxxx
36. Article 4.1 of the TSA deals with TSPs obligations in the
development of the Project. In terms of the Article 4.1(c), the TSP, at
its own cost and expense, observe, perform, comply with, perform,
undertake and be responsible for entering into Connection Agreement
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with the CTU/STU (as applicable), in accordance with the Grid Code.
Article 4.2 of the TSA provides for the LTTCs obligations in
implementation of the Project, which includes the arranging and
making available the interconnection facilities to enable the TSP to
connect to the Project. The Petitioner has stated that though the SCOD
of Elements 2 and 3 were 31.12.2015, the interconnection facilities
required for Elements 2 and 3 were made available by PGCIL only on
6.9.2016 and 28.7.2016 respectively. Article 6.1.2 of TSA dealing with
connection with the inter-connection facilities provides as under:
“6.1.2 The RLDC/SLDC (as the case may be) or the CTU/STU (as
the case may be) of the Lead Long Term Transmission Customer
may, for reasonable cause, including failure to arrange for
interconnection Facilities as per Article 4.2 defer the connection for
up to fifteen (15) days from the date notified by the TSP pursuant to
Article 6.1.1 if it notifies to the TSP in writing, before the date of
connection, of the reason for the deferral and when the connection is
to be rescheduled. However, no such deferment on one or more
occasions would be more than an aggregate period of 30 days.
Further, the Scheduled COD would be extended as required, for all
such deferments on day for day basis.
6.1.3 Subject to Articles 6.1.1 and 6.1.2, any Element of Project
may be connected with the Interconnection Facilities when:
(a) it has been completed in accordance with this Agreement and
the Connection Agreement;
(b) it meets the Grid Code, Central Electricity Authority (Technical
Standards for Connectivity to the Grid) Regulations, 2007 and
all other Indian legal requirements and
(c) The TSP has obtained the approval in writing of the Electrical
Inspector certifying that the Element is ready from the point of
view of safety of supply and can be connected with the
Interconnection Facilities.”
37. Further, Article 6.2.1 of the TSA provides as under:
“6.2.1 An Element of the Project shall be declared to have
achieved COD seventy two (72) hours following the connection of the
Element with the Interconnection Facilities or seven (7) days after
the date on which it is declared by the TSP to be ready for charging
but is not able to be charged for reasons not attributable to the TSP
or seven (7) days after the date of deferment, if any, pursuant to
Article 6.1.2.
Provided that an Element shall be declared to have achieved COD
only after all the Element(s), if any, which are pre-required to have
achieved COD as defined in Schedule 3 of this Agreement, have been
declared to have achieved their respective COD.
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6.2.2 Once any Element of the Project has been declared to have
achieved deemed COD as per Article 6.2.1 above, such Element of
the Project shall be deemed to have Availability equal to the Target
Availability till the actual charging of the Element and to this extent,
shall be eligible for payment of the Monthly Transmission Charges
applicable for such Element.”
38. As per the above said provisions, an element of the project shall
be declared to have achieved COD 72 hours following the connection of
the element with the interconnection facilities or 7 days after the date
on which it is declared by the TSP to be ready for charging, but is not
able to be charged for reasons not attributable to the TSP. Once the
element is declared to have achieved the deemed CoD in terms of
Article 6.2.1 of the TSA, such element shall be deemed to be
availability equal to target availability till the actual charging of the
element and is entitled to payment of monthly transmission charges
applicable to such element. In the present case, the Petitioner in terms
of Article 6.1.2 had intimated BESCOM vide letter dated 21.12.2015
about the non-availability of interconnection facilities required for
completion of Elements 2 and 3 and the delay in approval by KIADB for
commencement of construction activity of Element 2 in KIADB area and
accordingly sought the extension of SCOD (from 31.12.2015) of the
said Elements by BESCOM and other LTTCs. However, neither the CTU
nor the LTTCs took any action for deferment of SCOD on account of non
-availability of inter-connection facility. Thus, the Petitioner was not in a
position to declare the COD of Elements 2 and 3 within the SCOD i.e
31.12.2015 as the construction works were not completed. In our view,
even in the absence of any inter-connection facilities, the Petitioner
could have declared deemed COD of elements 2 and 3 in accordance
with Article 6.2.1 of the TSA, in case these elements were ready and
available for charging by 31.12.2015. Having not done so, the
Petitioner cannot plead that the delay in completion of the project is on
account of the nonavailability of inter-connection facilities by PGCIL. In
this background, we hold that the non-availability of inter-connection
facilities cannot be considered as a ‘force majeure event’ as claimed by
the Petitioner. The prayer of the Petitioner on this ground is therefore
rejected.
39. It is however noticed that the Petitioner vide letter dated
5.7.2016 informed all the LTTCs that construction work of Element 3
(400 kV D/C TL Madhugiri to Bidadi) had been completed and the said
line was ready for charging. The Petitioner also informed that since CEA
had approved the energisation of the said line on 4.7.2016, it shall
declare deemed COD of Element 3, seven days after the date of the
said notice, in the absence of the inter-connection facilities, in
accordance with Article 6.2.1 of the TSA. The relevant portion of the
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letter dated 5.7.2016 is extracted hereunder:

To,
The Managing Director BESCOM, KR Circle, Bangalore Karnataka
State
Dear Sir,
Sub: Kudgi Transmission Limited- Notice on the readiness of 400
kV Double Circuit (Quad) Madhugiri-Bidadi Transmission line for
Charging-reg.
Ref1: Our letter no. KTL-LTTC:2016–17:012 dated 10.5.2016
Ref2: Approval for energization from CEA (Ref no.
CAE/4/EI/INSP/2015/dated: 4.7.2016)
xxxxxxxxxxxx
We would like to inform you that the construction works for the
400 kV Double Circuit (Quad) Madhugiri-Bidadi Transmission line are
completed however since the interconnection facilities at Bidadi sub-
station is not made ready by PGCIL till date, the subject line cannot
be charged and any delay in this regard shall not be attributable to
KTL.
Further, we are glad to inform that the Electrical Inspectorate,
Central Electricity Authority (CEA) has inspected the 400 kV Double
Circuit (Quad) Madhugiri-Bidadi Transmission line and certified the
completion of works under the scope of Kudgi Transmission Limited
(KTL). Electrical Inspectorate, CEA has not issued the ‘Approval for
Energization’. Approval copy from CEA is attached for your reference.
xxxxxxxxxxx
In view of the above clauses your support is solicited in advising
PGCIL for providing the inter-connection facilities for Element 3 of
the Kudgi project (400 kV Double Circuit (Quad) Madhugiri-Bidadi
Transmission line) at the earliest falling which KTL shall be entitled
to declare deemed COD 7 (seven) days for Element 3 of Kudgi
project from the date of this notice.
Thanking you
Yours faithfully
For Kudgi Transmission Limited
(P G Suresh Kumar)
Director”
40. Similarly, the Petitioner vide letter dated 12.9.2016 informed all
the LTTCs that the construction works of Element 2 (765 kV D/C
Narendra (new) to Madhugiri) had been completed and the said line
was ready for charging. The Petitioner also informed that since CEA had
approved the energisation of the said line on 10.9.2016, it shall declare
deemed COD of Element 3, seven days after the date of the said notice,
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in the absence of the inter-connection facilities, in accordance with

Article 6.2.1 of the TSA. The relevant portion of the letter dated
12.9.2016 is extracted hereunder:
“To,
The Managing Director BESCOM, KR Circle, Bangalore Karnataka
State
Dear Sir,
Sub: Kudgi Transmission Limited- Notice on the readiness of 765
kV Double Circuit (Hex) Narendra (New) - Madhugiri Transmission
line for Charging-reg.
Ref2: Approval for energization from CEA (Ref no.
CAE/3/EI/INSP/2016/dated: 10.9.2016)
xxxxx
We would like to inform you that the construction works for the
765 kV Double Circuit (Hex) Narendra (New) - Madhugiri
Transmission line are completed in all respect and is ready for
energization.
Further, we are glad to inform that the Electrical Inspectorate,
Central Electricity Authority (CEA) has inspected the 765 kV Double
Circuit (Hex) Madhugiri-Bidadi Transmission line and certified the
completion of works under the scope of Kudgi Transmission Limited
(KTL). Electrical Inspectorate, CEA has not issued the ‘Approval for
Energization’. Approval copy from CEA is attached for your reference.
xxxxxxxxxxx
We once again request you to make the charging facilities
available at the earliest. In view of the above clauses, in the absence
of the interconnection facilities for energization Element 2 of the
Kudgi Project (765 kV Double Circuit (Hex) Narendra (New) -
Madhugiri Transmission line) shall be entitled to declared to achieve
deemed COD 7 (seven) days after the date of this notice.
Thanking you
Yours faithfully
For Kudgi Transmission Limited
(P G Suresh Kumar)
Director”
41. Thereafter, the Petitioner declared the deemed COD of Element 2
on 19.9.2016 and Element 3 on 13.7.2016 after completion of
mandatory seven days period in terms of Article 6.2.1 of the TSA and
vide letters dated 19.9.2016 and 27.7.2016 informed all the LTTCs
about deemed COD of Elements 2 and 3 respectively. In our view, the
Petitioner has complied with the provisions of the TSA while declaring
the deemed CoD of Elements 2 and 3 as above. Accordingly, in terms of
the TSA, the Petitioner is entitled for payment of monthly transmission
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charges with the deemed availability equivalent to target availability,

till the element is actually charged and put to use.
B & C. Law and Order & Right of Way (ROW) issues
42. In addition to the above, the force majeure events relied upon
by the Petitioner in clause B & C of para 8(xi) above viz., Law & Order
and ROW issues at various villages of Bellari, Bijapur, Chitradurga,
Koppak Tumkur and Ramanagara District as justification for the delay in
declaration of COD of Elements 2 and 3 are examined together in the
subsequent paragraphs.
43. The Petitioner has submitted that certain parcels of private land
in the districts of Tumkur and Ramanagara have remained inaccessible
due to law and order situation. It has submitted that despite the
District Collector notifying the rates payable as compensation, the local
leaders did not allow access to the site. The Petitioner has submitted
that it was ready and willing to pay the compensation as determined by
the District Collector. However, the demand for compensation was akin
to the market rate for sale and purchase of land in the area. The
Petitioner has stated that it sought all possible assistance in relation to
the issue and even sought Police protection for the Personnel and
Machinery of the Petitioner and its contractors. The Petitioner has
further submitted that it had been keeping the LTTCs informed of on
the ground situation and law and order issues faced by it and the
contractors at site and in many districts and villages and had to request
police intervention in various locations including but not limited to
Bijapur district, Bellary district, Hagari Bommanahalli Taluk, Tumkur
district and Ramanagara district. The Petitioner has submitted that it
was unable to move forward in accordance with the timelines for SCOD
as the time taken for Right of Way either by legal process/police
intervention or by negotiation has been time consuming. The Petitioner
has further stated that the Hon'ble High Court of Karnataka, Dharwad
Bench and the District Munsiff Court, Hagari Bommanahalli had issued
ex-parte interim injunction orders against the Petitioner based on
petitions filed by landowners, as a result of which the Petitioner was
unable to complete the works within the SCOD of the project i.e
31.12.2015. Accordingly, the Petitioner has submitted that the orders
of the Court and the works being kept in abeyance clearly evidences
that the force majeure situations had made it impossible for the
Petitioner to complete the project within the time lines. The Petitioner
has furnished copies of orders of the Court and the correspondences
addressed to various authorities requesting police protection and
support from local authorities in compliance with the directions of the
Commission.
44. The Respondent, KSEBL has submitted that the laxity on the
part of the Petitioner in timely intimating the LTTCs about the issues,
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affected the progress of the project resulted in the undue delay in

completing the works. It has also submitted that the Petitioner has not
informed the law and order problems and also not furnished the
progress reports on a monthly basis to the LTTCs. Hence, KSEBL has
prayed that the Commission may not consider the request of the
Petitioner to consider the reasons for delay as ‘Force Majeure’ as the
Petitioner has failed to comply with the obligations under the TSA. The
Respondent No. 1, BESCOM has submitted that the Petitioner has not
substantiated or corroborated its submissions with any supporting
documents. It has also stated that the submission of the Petitioner that
the correspondence between Petitioner and BESCOM is produced at
Annexure J is false as the letters are not authenticated. The Respondent
has also stated that it was the responsibility and obligation of the
Petitioner to ensure that the works progressed in a smooth manner
which the Petitioner has failed to do. The Respondent has stated that
the Petitioner was supposed to complete the project as per Schedule 3
of the TSA and the Petitioner was aware of the completion schedule of
the project at the time of signing the TSA. The Respondent has
contended that no reliance can be placed on the documents relating to
law and order problems in Bijapur, Bellari, Tumkur and Ramnagar
districts in Annexure-J of the Petition as same is unauthenticated. Even
if it is considered that the Petitioner had approached concerned
authorities for sake of argument, it may be noted that the Petitioner
has approached said authorities only after the SCOD. This according to
the Respondent proves that the Petitioner has not been diligent in
executing the project. The Respondent has added that it was the
responsibility of the Petitioner to carry out the survey and finalize the
route and pay compensation to land owners and clear the issues
pertaining to Right of Way. Accordingly, the Respondent has submitted
that it is not entitled for extension of SCOD on account of the failure on
the part of the Petitioner in performing his obligations as prescribed in
the TSA.
45. The submissions of the parties and the documents furnished on
record have been considered. While the Petitioner has submitted that
the Law & Order issues along with ROW issues in various villages had
caused stoppage of construction activities thereby causing delay in the
completion of the Elements 2 and 3 within the SCOD of 31.12.2015,
the Respondent BESCOM has argued that the Petitioner had approached
the authorities only after the SCOD of the elements and hence not
entitled for condonation of delay. In this background, the question for
consideration is whether the Law & Order and ROW issues had impacted
the construction prior to the SCOD of the elements of the Petitioner and
the steps taken by the Petitioner to mitigate the same.
46. As stated, the SCOD of Element 1 (2 × 400 kV Kudgi-Narendra
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(new) transmission line) of the Petitioner was 28.2.2015 and Elements

2 and 3 were 31.12.2015. As against this, the Petitioner had declared
deemed COD of Element 1 on 4.8.2015, Element 2 on 19.9.2016 and
Element 3 on 27.7.2016. The Petitioner was granted approval by the
Ministry of Power, GOI, under Section 164 of the Electricity Act, 2003
for the placing of electric lines for the transmission of electricity and
accordingly the Petitioner had commenced construction activities of
Element 1 during the month of June, 2014. From the Petitioner's letter
dated 21.8.2014 addressed to the District Collector, Bijapur, it is
noticed that the Petitioner had sought the intervention of the said
authority to resolve the crop compensation issue for different type of
towers, as the land owners did not agree with the crop compensation
offered by the Petitioner and stopped the construction activities of
Element 1 by the Petitioner. Thereafter, by letter dated 30.10.2014, the
Petitioner while seeking intervention of the District Collector, Bijapur for
taking up the construction activities of Element 1 without interruption
by landowners, had informed the authority that entire amount of
compensation as proposed is deposited with the Revenue department.
Subsequently, the scope of work of Element 1 was completed on
27.3.2015 and the deemed COD of the said element was declared by
the Petitioner on 4.8.2015 due to non availability of interconnection
facility required to be developed by PGCIL.
47. As regards Elements 2 and 3, the submission of BESCOM that
the Petitioner had approached the authorities only after the SCOD of
the said elements (31.12.2105) is contrary to records and is not
acceptable. Except for bald denials, the Respondent has not
refuted/objected to the contents of the Petitioners' letter to the
authorities seeking intervention on law & order issues and has also not
adduced any evidence or justification to show that law & order issues
had not affected the performance of these elements of the Petitioner
under the TSA. It is noticed from Petitioner's letter dated 9.6.2015
addressed to the District Collector, Ramnagara that some of the land
owners, after receipt of the mutually agreed crop/tree compensation,
had obstructed and stopped the entire construction activities of the 400
kV Madhugiri-Bidadi line passing through Ramnagara district, with
demands for higher compensation. The Petitioner while pointing out
that the entire construction activities had come to a grinding halt since
May, 2015 due to resistance from land owners, had sought the
intervention of the District Collector to provide necessary security to the
personnel working on the said line and to permit the construction work,
without interruption from land owners. The relevant portion of the said
letter is extracted hereunder:
“As you are aware, some part of 400kV Madhugiri-Bidadi line is
passing through Ramnagara District and upon payment of crop/tree
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compensation which was arrived on mutual consensus basis,

substantial progress is achieved in this section of the line.
However, after receipt of agreed compensation, the landowners in
Ramnagara district have stopped entire construction activities with
demands for higher compensation. This issue was brought to your
notice on 5th May, 15.
Further, on 12th May, 15, the matter was discussed in detail in
your good office in Ramnagara and following compensation was
suggested by us for the tower locations falling in Ramnagara district.
However, keeping proximity of Bidadi to Bangalore in view, two
separate compensations were suggested.
Xxxx
In addition to this, any compensation towards the damage of
crop/tree shall be paid as per the assessment report of
Horticulture/Agriculture/Forest/revenue deptts, wherever applicable.
We would bring to your kind notice that, commissioning of the
subject transmission project is scheduled in the month of Dec'15.
Due to severe resistance from the land owners, entire construction
activity came to a grinding halt since May, 15, which has adverse
impact on project progress thereby affecting overall commissioning
schedule of the project…”
48. Further, the Petitioner vide letter dated 3.8.2015 had sought the
intervention of the District Magistrate, Tumkur District to provide
necessary security for the personnel of the Petitioner working on Tower
No. 24/4 of 400 kV Madhugiri-Bidadi line, as one local villager, Shri
Chennbasaiah resident of Village T.G. Palya, Honnidike, Tumkur, was
threatening to commit suicide and was insisting for shifting of the said
line passing over his land, despite compensation being paid in terms of
the Deputy Commissioner's order dated 8.7.2014. The relevant portion
of the said letter is extracted hereunder:
“Further in Tumkur District, the Hon'ble District Magistrate,
Tumkur exercising the rights under Section 16 of the Indian
Telegraph Act, 1885, vide Letter No. MAG(1)CR250/2014–15 dated
8.7.2014) has issued orders for the compensation to be paid in the
Tumkur district towards the construction of transmission line.
Accordingly Kudgi Transmission Ltd is paying the compensation as
per the above referred DC order.
Tower No. 24/4 of 400 kV Madhugiri -Bidadi line is falling in the
hands of Mr Puttaranhaiah, resident of Village T.G. Palya, Honnudike
and Mrs Shobha resident of village T.G. Palya, Honnudike.
Accordingly, we have paid the foundation/erection amount to land
owners and they accorded their consent for commencement of
foundation work but one local villager Mr Chennbasaiah Sy No. 34/2
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resident of Village T.G. Palya, Honnudike, Tumkur is trying to

threaten our project team and insisting to shift the line which will
pass over his land and stating that if we will not do so, he will
commit suicide or hand himself
Moreover, we have completed foundation and erection on both
proceeding and succeeding towers, so shifting or rerouting of line is
not at all possible and same is already to Mr Chennbasaiah even
though he threatening to commit suicide. This issue is already
brought into the notice of SI, Hebbur & CI, Kayathsandra.
Under the above facts and circumstances, keeping the stringent
project timelines, we solicit your cooperation in completing the
construction work on location No. 24/4 in Village T.G. Palya,
Honnudike, Tumkur (Taluk & Dist) also request you to please instruct
concerned authorities for providing necessary security to our
personnel working on the above transmission line or to pass any
other orders deemed fit under the given circumstances”
49. Similarly, the Petitioner vide letter dated 12.8.2015 had sought
the intervention of the Superintendent of Police, Tumkur District to
provide security to the personnel of the Petitioner involved in stringing
activity, against some landowners obstructing the construction of the
transmission line in Village Gauda Halli, Hobli-Bellavi, Tehsil & District
Tumkur. The relevant portion of the said letter is extracted hereunder:
“We have completed the Foundation and erection activity in
village Gaudahalli after making payments as per the order of the
Honble District Magistrate, Tumkur and during stringing activity,
some land owners are obstructing the construction work of the said
transmission line. In addition to this we have paid compensation for
trees also, which will affect the stringing work of said line and joint
inspection of same as carried out in preens of concern farmers along
with Horticulture/Forest officials and Revenue officials respite the
fact after receipt of compensation for trees they are not allowing to
fell all the trees and stopped the stringing activity with demands for
higher compensation”
50. Subsequently, the Petitioner by letter dated 2.9.2015 addressed
to the District Collector, Bellary and letter dated 5.9.2015 addressed to
the Sub-Inspector of Police, Hagari Bommanahalli, brought to the
notice of the authorities that some of the miscreants/landowners of
Hagari Bommanahalli village, namely Ningappa Bydagi, Ambasa G
Singri and Amruth Kapadia, were obstructing and stopping the
construction activity in 765 kV D/C Narendra (new)-Madhugiri
transmission line, leading to damage to equipments and
personnel/tampering with the construction equipment's. The Petitioner
had accordingly sought the help of the local authorities to permit the
construction work without any interruption from the landowners. The
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relevant portion of the letter dated 2.9.2015 is extracted hereunder:

“Further we would like to bring to your notice that dspte of
making payments towards agreed compensation to the landowner
and seeking his permission for commencement of work in his land, a
group of miscreants other than landowner are obstructing the
construction activity in Hagari Bommanahalli Village. Details of the
person stopping the works is mentioned below:
Xxx
They are stopping the work at site and even tampering with the
construction equipment leading to nuisance at site. This may lead to
severe damages to the Equipment and Personnel
handling/tampering with the construction equipment.
It is needless to mention that such nuisance leads to idling of
huge manpower and severely affecting the project progress in
achieving completion schedules…”
51. It is further observed that landowner Shri Ningappa Badagi had
filed Writ Petition No. 10966/2015 on 23.9.2015 before the Hon'ble
High Court of Karnataka, Dharwad Bench to restrain the Petitioner from
installing the high tension wire, towers and transformers near his land
bearing Survey Nos. 423/18 and 423/19 situated at Chitrapalli village
in Hagari Bommanahalli taluk. By order dated 23.9.2015, the Hon'ble
Court passed the following interim order:
“The petitioner and the respondent No. 3 should appear to Deputy
Commissioner Ballari in 1.10.2015 at 2.30 p.m and the Deputy
Commissioner Ballari should hear both of them and dispose of
representation dt 2.9.2015 filed by the petitioner before the Deputy
Commissioner Ballari”
52. In terms of the above order, the Deputy Commissioner & District
Magistrate, Ballari by order dated 17.10.2015 restrained Shri Ningappa
Bidagi (the Petitioner therein) from interfering with the work of the
Petitioner (the Petitioner herein) in the installation of high tension wire,
towers and transformers in or near the said land of the Petitioner. The
Petitioner was also accorded permission to carry out the work as per
approved alignment after taking necessary permission and payments to
landowners. The relevant portion of the said order dated 17.10.2015 is
extracted hereunder:
“No. REV.MAG.86.2015–16 DATED: 17-10-2015
In exercise of the powers vested in me u/sec 16 of the Indian
Telegraph Act 1885, the petitioner is hereby restrained from
interfering with the work of the respondents in installing the high
tension wire, power grid towers and transformers, in or near the
lands bearing Sy No. 423/18 and Sy No. 423/19 situated at
Chitrapalli village in Hagari Bommanhalli taluk. The permission is
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hereby is also accorded to the Kudgi Transmission Ltd to carry out

the work as per approved alignment after taking all necessary
permission and payments to landowners as stipulated under the
Act.”
53. The Petitioner vide letter dated 28.10.2015 informed the District
Collector, Tumkur that some of the landowners (Manjunath, Harish &
Syed Dastabair) were not allowing the construction activity in their land
despite making compensation payment as per order dated 8.7.2014 of
the District Collector and had sought security for its personnel to take
up the construction activity. The relevant portion of the letter dated
28.10.2015 is extracted hereunder:
“We would like to inform you that based on order dated
08.07.2014 issued from your good office on the compensation for
construction of transmission line we have completed substantial
amount of work in Tumkur District
Further, we would like to bring to your notice that despite of
making payment towards compensation (as per DC order) some of
the landowners are not allowing to take up the construction activity
in their land. Details are mentioned below:
Xxxx
They are demanding unreasonable compensation and not allowing
us to work.
It is needless to mention that such nuisance leads to idling of
huge manpower and severely affecting the project progress in
achieving completion schedules…”
54. Thereafter, the Petitioner by letter dated 23.11.2015 informed
the Deputy Commissioner & District Magistrate, Ballari District that Shri
Ningappa Badagi had refused to accept the compensation offered by
the Petitioner in terms of the said Order dated 17.10.2015 and
continued to obstruct the construction work in the 765 kV D/C Narendra
(new)-Madhugiri transmission line. Accordingly, the Petitioner sought
permission to take up the construction work in the said section and for
providing security to its personnel working in the said transmission line,
without interruption from landowners. The relevant portion of the said
letter is extracted hereunder:
“We would like to mention here that Mr. Ninjappa has refused to
accept the payment of compensation offered by KTL and has further
continued to restrain us from proceeding with the project work. We
would like to submit here that the actions of Mr. Ninjappa are in
violation of the above order passed by you and has a major
impediment in our project.”
55. Meanwhile, during the pendency of the above matters, the
Petitioner by letter dated 18.9.2015 to the District Collector, Koppal
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and letter dated 5.10.2015 to the Chief Secretary, Govt. of Karnataka,

brought to their notice the challenges faced by the Petitioner in
obtaining the Right to Use (ROU) for location of towers falling in the
land of Shri Megharaj s/o Giriyappa Raju (Survey No. 54/8, 51/5,
56/12) Badegal village, Koppal District. The Petitioner accordingly
requested these authorities to provide suitable security for its personnel
working on the said transmission line (765 kV D/C, Narendra (new)-
Madhugiri line) and for providing support to arrive at the compensation
towards crop damages to landowners as per IS 5613 (Part 3/sec 2),
section 10 of the Indian Telegraph Act, 1885 and Section 164 of the
Electricity Act, 2003. The relevant portion of the said letter dated
5.10.2015 is extracted hereunder:
“….We have received final approval from Railway as well as
National Highway Authorities and based on the approvals the
location for the tower is finalized. The towers are falling in the land of
Mr Megharaj s/o Giriyappa Raju (Survey no 54/8, 51/5, 56/12),
Badegal Village, Koppal District
We have explained him on the importance of project and also
requested him to allow us work in the above mentioned survey
numbers. He is being adamant and not allowing us to start the work.
We also explained that the locations are approved by the
government authorities hence there is no possibility of shifting the
locations. We also highlighted that under section 164 of Electricity
Act we have permission to enter any private property for the
construction of towers..”
56. It is pertinent to mention that the landowner Shri Megharaj filed
Writ Petition No. 112112/2015 before the Hon'ble High Court of
Karnataka, Dharwad Bench for direction on the Petitioner herein, to
obtain consent from the Deputy Commissioner and the National
Highway Authorities before laying the HT lines. The said Writ Petition
was disposed of by the Hon'ble Court on 23.11.2015 with direction to
the Deputy Commissioner & District Magistrate, Koppal to pass
appropriate orders after hearing the parties. Accordingly, the Deputy
Commissioner & District Magistrate, Koppal after hearing the Petitioner
and Shri Megharaj on 30.11.2015 in exercise of his powers under
section 16 of the Indian Telegraph Act, 1885, restrained Shri Megharaj
from interfering with the work of the Petitioner herein in the installation
of HT lines, towers and transformers within the lands of the respondent
situated in Dadegal village Taluk, district Koppal, vide Proceedings No.
REV/MAG/55/2015–16 C.No 19816 dated 9.12.2015. The relevant
portion of the Order dated 9.12.2015 is extracted under:
“In exercise of the powers vested U/s 16 of the Indian Telegraph
Act 1885, the respondent is hereby restrained from interfering with
the work of the petitioner in installing the HT lines, power grid
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towers and transformers, within the lands of the respondent Sy No.

54/8, 51/5, 56/12 situated at Dadegal village Taluk/Distriict,
Koppal.”
57. It is pertinent to mention that even after 31.12.2015 (the SCOD
of Elements 2 and 3), the construction work of the Petitioner continued
to be affected by Law & Order & ROW issues. This is evident from the
Suit (O.S. No. 12/2016) filed by one Shri Ambasa Singri before the
Civil Judge, Hagari Bommanahalli seeking temporary injunction against
the Petitioner herein from installing Tower and laying electrical lines by
the Petitioner near or over the schedule property. The Civil Judge by his
order dated 4.1.2016 granted temporary injunction restraining the
Petitioner herein from installing the electricity tower and laying
electrical lines over the property of the landowner. The relevant portion
of the order dated 4.1.2016 is extracted hereunder:
“Defendant company represented by its Managing Director and all
persons claiming through it are hereby restrained by way of
temporary injunction from installing electricity tower No. 28/E/4 and
29/0 and from drawing electricity lines near and over the suit
schedule property till the next date of hearing..”
58. Thereafter, the Civil Judge, after hearing the parties, by order
dated 2.2.2016 rejected the above said suit filed by Shri Ambasa Singri
with costs. The Petitioner thereafter, vide letter dated 8.3.2016 brought
to the notice of the District Collector, Chitradurga District the various
challenges faced by the Petitioner in the said district on account of
stoppage of construction activities by the landowners demanding
unreasonable compensation. Further, the Petitioner by letter dated
5.5.2016 requested the Sub-Inspector of Police, Bellavi, Tumkur Taluk
to provide security of its personnel working in Mudigire Village, Bellavi
Hobli, Tumkur Taluk & District wherein work was stopped due to
unreasonable demand for compensation of Rs 30 lakh by a landowner
Jayamma (survey no 162, House no 168), despite payment of
compensation in terms of Orders dated 8.7.2014 and 6.2.2015 of the
District Collector, Tumkur Taluk. The Petitioner also sent letter dated
27.5.2016 to the Chief Secretary, Govt. of Karnataka requesting his
intervention to resolve amongst other, the Law & Order issues in
Tumkur and Ramamagara Districts and also sought police protection
from landowners who were stopping the construction work. The relevant
portion of the said letter dated 27.5.2016 is extracted as under:—
Sub: Kudgi Transmission Line—Implementation of Transmission
system associated with NTPC Kudgi (3×800 MW) in Phase I-reg.
The following are the specific points for which we request your
kind intervention:
1. KIADB:—
xxxxxx.
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Law and Order Issues

a. Tumkur - In Kora Hubli and Bellavi Hubli, Kempanahalli,
Kolalkunde, Nilahal, Giriyanalli, Vasanthanarasapura,
Gaudahalli, Mudagere villages, we are being stopped by the
land owners in several locations inspite of producing gazette,
DC order, KIADB notification and caveat.
We approached SP Tumkur, Mr Karthik Reddy who in turn
instructed the inspector of the limit. However, with presence
of 1 or 2 police personnel, they are unable to convince the
mob. We are outnumbered and forced to move away from
the site locations.
b. Ramanagara - In Ramanagara under Bidadi Hubli, we have
specific issue in Ganekal village, due to serious political
intervention and because of this we are unable to work in
the other areas of Bidadi Hubli, Berehalli, Avergere,
Ballikuppe, Vajarahalli, Keteganahalli, Lingagaudanadoodi,
hoblibidadi, under Ramanagara
District in several of the locations for the same reasons mentioned
above, we are stopped by the present land owners. In the absence of
police protection, it is not possible for us to carry out the project
work.
The project is now delayed by over 6 months although we
completed over 90% of the project ahead of schedule.”
59. Again on 28.5.2016, the Petitioner requested the Inspector
General of Police, Bangalore Central to deploy adequate force for self-
protection, plant & material of the Petitioner to enable commencement
of construction work and to complete the project before 25th June,
2016. The relevant portion of the said letter is extracted as under:
“Sub: Police Protection- Kudgi Transmission Line -
Implementation of Transmission system associated with NTPC Kudgi
(3*800 MW) in Phase I- reg
We are to make this 491 KM line in readiness much before the
commencement of power generation from NTPC Kudgi plant.
However, we are now struggling at some places in Tumkur and
Ramanagara sites due to Law and Order problem.
a. Tumkuru- In Kora Hubli and Bellavi Hubli, Kempanahalli,
Kolalkunde, Nilahal, Giriyanalli, Vasanthanarasapura, Gaudahalli,
Mudagere villages, we are being stopped by the land owners in
several locations inspite of producing gazette, DC order, KIADB
notification and caveat. Our men and material are hence vulnerable.
Without understanding the land owners are demanding unreasonable
amounts. Sir this is a Government of India Project. As per Law & DC
order we are setting compensation.
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We approached SP Tumkur, Mr. Karthik Reddy who in turn

instructed the inspector of the limit. However, with presence of 1 or
2 police personnel, they are unable to convince the mob. We are
outnumbered and forced to move away from the site locations.
b. Ramanagara - Ganekal village, Berehalli, Avargere, Ballikupe,
Vajarahalli, Keteganahalli, Lingagaudandoodi, Hoblibidadi.
We specifically need the following Police strength.
1. Inspector - 1 no.
2. Sub- Inspector- 2 nos
3. Constables - 30 nos
Sir, we request you to deploy the above force for our self -
protection, plant & material above all to enable us to commence the
work & complete it before 25th June, 2016.”
60. Similarly, letter was also addressed to the Circle Inspector of
Police, Ramanagara, Ramanagara District on 13.6.2016 by the
Petitioner informing him the challenges faced by the Petitioner in the
completion of balance works in various villages in Bidadi Hobli, Taluk &
District Ramangara.
61. From the sequence of events narrated above, it is evident that
the works of Elements 2 and 3 of the Petitioner were affected even after
the SCOD (31.12.2015). It is noted that there has been continuous
obstruction/resistance from the landowners in various locations/villages
including Bijapur, Bellary district, Hagari Bommanahali Taluk, Tumkur
and Ramanagara district which resulted in the stoppage of construction
activities in these locations. Despite the Petitioner obtaining approvals
of the Railways and National Highway Authorities to enter the private
premises for the construction work of the Project and also making
compensation payment in terms of the orders of the Deputy
Commissioner, it was unable to proceed with the construction work of
the transmission lines due to serious law & order and ROW issues. The
Petitioner in our view, had taken reasonable efforts to mitigate the
delay by seeking help and cooperation of the District authorities to
permit the construction work and police protection for its personnel
working in these lines, In addition to this, the ex-parte orders of
injunction by Court, the hearings before the District authorities (Deputy
Commissioner & District Magistrate) for compensation payments to
landowners and obtaining clearances for ROW had also contributed to
the delay in the completion of the work beyond the SCOD of Elements 2
and 3. These events which resulted in delay in completion of the
construction work of Elements 2 and 3 are events of force majeure
which have affected the execution of the Project within the SCOD.
Therefore, the Petitioner is entitled for relief under force majeure.
D. Delay in obtaining ROW from the landowners for lands claimed by
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KIADB as notified land for acquisition

62. The Petitioner has submitted that as soon as KIADB refused to
grant permission for the original route, the Petitioner vide letter dated
26.5.2015 submitted an application for approval of the revised
alignment and permission to undertake works thereon. The Petitioner
has further submitted that CEA vide its letter dated 20.10.2015 had
requested KIADB to resolve/sort out the right of way issues in relation
to construction of Elements 2 and 3 of the Project. The Petitioner has
submitted that vide letter dated 24.11.2015 it had informed BESCOM
about the refusal of KIADB to grant approval for the original alignment
of Element 2. According to the Petitioner, the route plans had to be
revised as per instructions of KIADB and despite making all efforts in
relation to such land, KIADB had failed to grant approval for the same.
In response, the BESCOM vide letter dated 8.12.2015 had requested
KIADB to resolve/sort out the ROW issues on the Government land to
enable the Petitioner to complete its scope of work in accordance with
the TSA. The Petitioner has pointed out that it had by letter dated
21.12.2015 appraised BESCOM about the problems being faced by the
Petitioner in the completion of Elements 2 and 3 as a result of non-
availability of KIADB land and further requested BESCOM for extension
of the Scheduled COD on day to day basis, in terms of Article 6.1.2 of
the TSA. However, BESCOM, instead of agreeing to a revised COD, by
letter dated 30.1.2016 had directed the Petitioner to approach this
Commission and CEA for appropriate relief. The Petitioner has
submitted that having been granted approval under Section 164 of the
Electricity Act, 2003, the Petitioner can enter upon land for the placing
of electric lines or electrical plant for the transmission of electricity, but
in terms of Section 10 of the Indian Telegraph Act, 1885, such power
cannot be exercised qua land vested in the local authorities.
Accordingly, the Petitioner has submitted that it was unable to
complete the portion of Elements 2 and 3 which required access to land
notified by KIADB. In this background, the Petitioner has submitted
that the delay in grant of permission by KIADB is entirely for reasons
beyond its control and thus constitutes an event of force majeure,
which entitles it for a day to day extension of SCOD for completion of
obligations.
63. Per contra, the Respondent BESCOM has submitted that in
response to the request of the Petitioner vide its application dated
26.5.2015, KIADB vide its letter dated 1.6.2015 had directed the
Petitioner to propose an alternate route as the route proposed by the
Petitioner was already allotted. The Respondent has stated that the
Petitioner had on 27.7.2015 and 9.9.2015 submitted revised route plan
with KIADB and sought approval to commence work. Thereafter on
5.11.2015, the Petitioner had sought the approval of its revised plan
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from KIADB. However, KIADB on 30.11.2015 directed the Petitioner to

stop erecting towers and drawing lines on its land, since the Petitioner
had not paid compensation towards the use of land. The Respondent
has further submitted that the delay caused is due to the Petitioner not
adhering to the directions of KIADB and due to frequent changes
suggested by the Petitioner. It has stated that the problem is due to
Petitioner not conducting survey and not approaching KIADB in good
time. The Respondent has submitted that the Petitioner started seeking
approvals only when it was nearing the SCOD and has thus not been
diligent and delayed the implementation of the Project due to its own
omissions. The Respondent has added that the role of LTTCs is only to
assist and support the TSP in obtaining necessary approvals and had
accordingly by letter dated 8.12.2016 requested the CEO, KIADB to
sort out the ROW issues so that the transmission lines could be
completed well within time. The Respondent has also stated that in
terms of Article 5.1.2 of the TSA, the Petitioner shall not be relieved of
its obligations or be entitled to extension of time for reason of
unsuitability of site or transmission line route for whatever reason.
Accordingly, the Respondent has submitted that the ROW issues do not
constitute a force majeure event and the Petitioner is not entitled for
extension of SCOD. The Respondent, KSEBL has submitted that the
LTTCs were informed of the delay of approval by KIADB only on
24.11.2015 by the Petitioner and hence there has been laxity on the
part of the Petitioner in timely intimating the LTTCs about the issues
which affected the progress of the project which resulted in the undue
delay in completion of the works.
64. The submissions of the parties have been considered. In terms
of Article 5.1.3 read with Article 4.1(a) of the TSA, it is the
responsibility of the Petitioner to obtain all consents, clearances and
permits relating to ROW for developing the project. As per Article 5.1.4
(b),(c) & (d), the Petitioner has to carry out the final selection of the
site including geo-technical investigation and survey in order to
determine the final route of the transmission line and the Petitioner on
its own cost has to seek access to the places where the Project is
executed by paying necessary compensation. While the Petitioner has
contended that the delay in grant of permission by KIADB to put up the
line and towers with regard to Element 2 in KIADBs land in Tumkur
District is a force majeure event, the Respondent, BESCOM has argued
that the Petitioner had belatedly sought the approval from the
concerned authorities and has not been diligent and delayed the
implementation of the Project on its own.
65. In the present case, the Petitioner after a detailed survey of 765
kV D/C Narendra (New)-Madhugiri line had observed that this line was
passing through KIADB plot situated in Bajanahalli, Thippedasarahalli,
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Yeladadalu & Nagenahali Village, Tumkur District and by letter to the

Development Officer, KIADB, dated 26.5.2015 had sought approval of
the route alignment with tower spotting data, at the locations
mentioned in the tower schedule. In response, KIADB by letter dated
1.6.2015 informed the Petitioner that the proposed route passing
through Vasanthanarasapura, Phase-1, 2 & 3 had already been allotted
and accordingly requested the Petitioner to propose an alternate route
without affecting the plots for consideration by KIADB. The relevant
portion of the said letter is extracted hereunder:
“Adverting to the above, Adverting to the above, the proposed
route alignment along with tire tower spotting data, passing through
Vasanthanarasapura, Phase-1, 2 & 3, is not viable for consideration,
because the proposed route passing through the plots has already
been allotted by KIADB.
Hence, you are hereby requested to propose an alternate route
without affecting the allotted plots for consideration by KIADB.”
66. Again, the Petitioner by letters dated 27.7.2015 and 9.9.2015
submitted revised proposal as advised by KIADB and sought approval
of KIADB for the said route for commencement of work. Since the
Petitioner had informed the CEA of the delay in approval by KIADB, the
CEA vide its letter dated 20.10.2015 requested KIADB to resolve/sort
out the right of way issues in relation to construction of Element 2 and
3 of the Project. Subsequently, the Petitioner vide letter dated
5.11.2015 sought approval of KIADB for the line passing through
KIADB plots at the location mentioned in the tower schedule. Due to
delay by KIADB to grant approval, the Petitioner vide letter dated
24.11.2015 informed BESCOM about the refusal of KIADB to grant
approval for the original alignment of Element 2. In response, BESCOM
vide letter dated 8.12.2015 requested KIADB to resolve/sort out the
ROW issues on the Government land to enable the Petitioner to
complete its scope of work in accordance with the TSA. Thereafter, the
Petitioner vide its letter dated 21.12.2015 had informed BESCOM of the
delay in approval of KIADB land and had requested for extension of
COD for 180 days due to the said force majeure event. The contents of
the said letter are extracted as under:
“Sub:— Kudgi Transmission Limited- Implementation of
Transmission System associated with NTPC Kudgi (3 × 800 MW in
Phase I) - Request for Time extension for Element 2 & Element 3 -
reg.
Further vide our letter referred above (Ref 2), we had informed
that Element 2 (765 kV D/C Narendra(New)-Madhugiri is passing
through KIADB land. We had submitted our first proposal on 26th
May 2015 and till date we have not received approval for
commencement of construction activity in KIADB area.
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In view of above KIADB issue, we would like to bring the following

clauses to your notice:
• As per Transmission Service Agreement clause no 11.3(b)(i) the
unlawful, unreasonable or discriminatory revocation of, or
refusal to renew, any consents, Clearances and permits
required by the TSP to perform their obligations under the RFP
Project Documents or any unlawful, unreasonable or
discriminatory refusal to grant any other Consents, Clearances
and Permits required for the development/operation of the
Project, provided that a Competent Court of Law declares the
revocation or refusal to be unlawful, unreasonable and
discriminatory and strikes the same down
• As per Transmission Service Agreement clause No. 4.4.2, In the
event that an Element or the Project cannot be commissioned
by its Scheduled COD on account of any Force Majeure Event as
per Article 11, the scheduled COD shall be extended, by a ‘day
for day’ basis, for a maximum period of one hundred and
eighty (180) days.
Vide letter no KIADB/D0/TMK/685/2015–16 dated 01.06.2015
(Copy attached), KIADB has refused to grant the approval and
suggested to adopt alternative route. However approval on the
alternative route is still awaited from KIADB. The refusal to grant
approval by KIADB has restricted TSP (Kudgi Transmission Limited)
to perform their obligation. We also brought this matter to the notice
of Central Electricity Authority (CEA) and vide letter no
CEA/PS/PSPM/1/35(A)/2015/1308-10 dated 20.10.2015 CEA has
immediately directed KIADB to issue the approval at the earliest
(copy attached).
As the TSP is not responsible for this delay and its force majeure
condition, we request you to extend the scheduled COD of Element 2
by one hundred and eighty (180) days.
Further, due to criticality associated with the subject matter,
kindly revert at the earliest within a period of one week hereof and
provide us a convenient time slot to discuss on further course of
action.”
67. Subsequently, BESCOM instead of considering the grant of
extension of time, by letter dated 30.1.2016 directed the Petitioner to
approach the Central Commission and the CEA for appropriate relief. It
is therefore evident that BESCOM though had the knowledge that the
work of the Petitioner has been delayed due to the non-availability of
approval by KIADB, had not granted extension of COD to the Petitioner
in terms of the TSA. In the written submissions of BESCOM, it has been
contended by BESCOM that the Petitioner was directed by KIADB on
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30.11.2016 to stop erecting the towers and drawing lines on its land,
as the Petitioner had not paid compensation towards the use of land.
This submission is however not supported by any documentary
evidence. The documents available on record do not also support the
said contention of BESCOM. Even otherwise, this submission of
BESCOM cannot be considered as the Petitioner after completing its
scope of work of Elements 2 and 3 and based on the certificate of
energisation by CEA on 10.9.2016 and 4.7.2016 had declared deemed
COD of the Elements 2 and 3 on 19.9.2016 and 27.7.2016 respectively
due to non-availability of the required interconnection facilities.
68. It is observed that the Petitioner vide its letter dated 27.5.2016
to the Chief Secretary, Govt. of Karnataka, brought to his notice the
issues faced relating to KIADB lands and had sought his intervention to
resolve the same. The relevant portion of the said letter dated
27.5.2016 is extracted as under:—
Sub: Kudgi Transmission Line—Implementation of Transmission
system associated with NTPC Kudgi (3 × 800 MW) in Phase I-reg.
The following are the specific points for which we request your
kind intervention:
1. KIADB:— 10 of our tower locations are coming in Phase 4 and 6
of KIADB acquisition in Vasanthanarasapura Industrial Area. We met
Mr. Pankaj Pandey, CEO & EM of KIADB who has assured us a
solution, within a week. As the matter has been pending for over 6
months, we request your help also in the matter.
Xxxxx
69. Thereafter, in a meeting of the Chief Engineer (PSPM), CEA on
17.6.2016 (MOM dated 21.6.2016), the Petitioner had submitted the
progress of construction work of Elements 2 and 3 as under:
Transmission system associated with Kudgi STPS (3×800 MW)
The representative of NTPC informed that they are almost ready
and 1st 800 MW Unit at Kudgi STPP would be synchronized by end of
June 2016 and requested for readiness of associated transmission
system. M/s KTL(L&T) representative informed that eiement-1 i.e
Kudgi -Narendra (new) 400 kV 2xD/C line has been completed on
3/2015 and expressed his concern on the availability/readiness of
400 kV bays at Narendra (New) S/S, Madhugiri and Bidadi
substation for Element 2 and element 3 respectively. M/s KTL (L&T)
representative submitted progress of Element-1, 2 &3 as under;
Element-I: Kudgi STPS - Narendra (new) 400 kV 2 × D/C line -
completed
Element-2
Narendra (new) - Madhugiri 765 kV D/C line (initially operated at
400 kV).
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Length 379.48 ckm

Location 867 nos
Foundation Completed 852 nos
Tower Erected 850 nos
Stringing completed 367.68 ckm
Element-3
Madhugiri - Bidadi 400 kV D/C line
Length 93 ckm
Location 256 nos
Foundation Completed 256 nos
Tower Erected 256 nos
Stringing completed 87.67 ckm
M/s KTL representative informed that element -3 and element -2
would be completed by end of June, 16 and July, 16 respectively, if
bays are made ready at Narendra (new), Madhugiri and Bidadi s/s by
PGCIL.
M/s KTL (L&T) representative highlighted the stalemate in
obtaining approval for Right of Use for construction of towers in 10
locations in Element 2. These 10 tower locations are falling inside
M/s KIADB notified land. It was highlighted that matter is pending
with KIADB for the past 13 months due to indecisiveness on the part
of KIADB, It was informed that KIADB concluded Right of Use for
KPTCL 400 KV line corridor inside their premises recently and for this
Rs. 5.6 Cr has been levied as charges to KPTCL by KIADB for 70
tower locations. M/s KTL (L&T) representative informed that KIADB is
demanding Rs. 50 Lacs per acre for their lines in KIADB area. In
addition, land owners have to be paid compensation as land
acquisition is substantially at pre acquisition stage at 7 Iocs and at
the final stages in 3 Iocs out of 10. M/s KTL (L&T) representative
submitted a copy of letter from KIADB (letter No.
KIADB/D0/TMK/2042/2015–16 dtd 20.02.2016) vide which approval
for implementation of Transmission line tower in KIADB industrial
area phase III, IV & VI earlier accorded. The approval was issued by
Development Officer KIADB. However, M/s KTL (L&T) informed Chief
Engineer (PSPM) that successive heads of KIADB orally stopped M/s
KTL (L&T) not to proceed. Chief Engineer (PSPM) assured M/s KTL
(L&T) that he will appropriately take up the matter with CEO
(KIADB) to resolve if there is any issue for M/s KTL(L&T) taking up
the erection of the towers for transmission lines passing along the
corridor.
M/s KTL (L&T) representative expressed their concern on Element
2 which is getting connected at 400 KV bays of Narendra and
Madhugiri S/S at initial stage and later line shall be connected at
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765 KV bay. The representative of M/s KTL (L&T) wanted clarification

and confirmation on who will bear the cost incurred due to this
temporary arrangement. Chief Engineer (PSPM) advised M/s KTL
(L&T) representative to take up matter with CERC as per the
conditions stipulated in respective Transmission Service Agreement
(TSA).
M/s KTL(L&T) representative requested for anti-theft charging of
their transmission lines and CE (PSPM) advised him to take up this
issue with CE (EI), CEA.”
70. It is clear from the above that the work on erection of towers in
10 locations which fall within the KIADB area had suffered on account
of the delay in approvals by the KIADB. Though BESCOM was a
participant in the meeting dated 17.6.2016, it had not raised any
objections to the submissions of the Petitioner that approvals for 10
tower locations in KIADB areas were pending for more than 13 months
and that the work had been stopped by KIADB by oral instructions.
Even otherwise, it is noticed that BESCOM had earlier requested KIADB
to resolve/sort out the ROW issues on the Government land to enable
the Petitioner to complete its scope of work in accordance with the TSA.
Further, when the Petitioner requested BESCOM to extend the SCOD on
account of the delay in approvals by KIADB, BESCOM had advised the
Petitioner to approach the CEA and the CERC for necessary reliefs.
Therefore, BESCOM cannot now contend that the delay is only on
account of the Petitioner not being diligent in its survey and had
approached the KIADB belatedly. As the Petitioner had submitted the
proposals on 26.5.2015, 27.7.2015 and 9.9.2015 for approval, as
advised by KIADB, it was obligatory on the part of KIADB to either
approve the proposals submitted by the Petitioner or to reject the same
with reasons, instead of delaying the approvals and apparently giving
oral instructions to the Petitioner not to proceed with the work in KIADB
areas. In our view, the delay in approvals by KIADB for the construction
work of towers within the KIADB areas had caused considerable delay
in the completion of the project. The delay in approvals by KIADB
cannot, in our view, be said to be attributable to the Petitioner.
71. KSEBL has contended that 10% of the works of the transmission
system was still pending at KIADB areas and some other locations due
to compensation issues and hence, the Petitioner could not have
commissioned the project earlier even if the interconnection facilities
were made available. It is observed that out of the 15 foundations and
17 towers in respect of Element 2 which was pending completion as on
June, 2016, erection of towers in 10 locations fall within the KIADB
areas. The delay in completion of erection work/foundation as regards
Elements 2 and 3 due to law & order and ROW issues in other areas has
already been examined at length in paragraph 45 above and the same
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is not reiterated here for sake of brevity. In our considered view,

withholding of permission by a local authority (KIADB) has resulted in
delay in the construction work of these elements and the same is
beyond the control of the Petitioner. We therefore hold that the delay in
approval of route alignment by KIADB for erection of towers within the
KIADB areas coupled with law & order and ROW issues is a force
majeure event, which has contributed to the delay in the completion of
the work of Elements 2 and 3 of the Petitioner.
72. Based on the above discussions, we hold that the (i) non-
availability of the required inter-connection facilities by PGCIL (ii) Law &
Order issues in various villages, including the districts of Tumkur,
Ramanagara and Bellary etc., and (iii) denial of approval by KIADB for
undertaking works on lands notified by KIADB are ‘force majeure’
events falling within the scope and definition of force majeure under
Article 11.3 of the TSA. These force majeure events, in our view have
affected the execution of the Project within the SCOD. Therefore, the
Petitioner is entitled for relief under force majeure. Article 11.7 of the
TSA provides for relief for force majeure events, which is extracted as
under:—
“11.7 Available Relief for a Force Majeure Event
Subject to this Article 11
(a) no Party shall be in breach of its obligations pursuant to this
Agreement except to the extent TSA for Selection of
Transmission Service Provider for that the performance of its
obligations was prevented, hindered or delayed due to a Force
Majeure Event;
(b) every Party shall be entitled to claim relief for a Force Majeure
Event affecting its performance in relation to its obligations
under this Agreement.”
73. Further, Article 4.4 provides for extension of time as under:
“4.4. Extension of time
4.4.2 In the event that an Element or the Project cannot be
commissioned by its scheduled COD on account of any Force Majeure
Event as per Article 11, the Scheduled COD shall be extended, by a
“day for day” basis, for a maximum period of one hundred and
eighty (180) days. In case the Force Majeure Event continues even
after the maximum period of one hundred and eighty (180) days,
the TSP or the Majority Long Term Transmission Customers may
choose to terminate the Agreement as per the provisions of Article
13.5.”
74. Though Article 4.4.2 provides for extension of SCOD upto a
maximum period of six months, after considering the circumstances for
delay due to non-availability of inter-connection facilities by PGCIL (ii)
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Law & Order issues in various villages, including the districts of Tumkur,
Ramanagara and Bellary etc., and (iii) denial of approval by KIADB for
undertaking works on lands notified by KIADB and the efforts made by
the Petitioner to mitigate the force majeure events, we allow the
extension of SCOD from 31.12.2015 till the dates of actual COD of the
Elements 2 and 3 of the project.
Issue No. 3: What reliefs should be granted to the Petitioner in
the light of the answer to the above issues?
75. The Petitioner has submitted that BESCOM despite being fully
aware of the events that has caused the delay in the construction of
Elements 2 and 3 of the Project, has issued letter dated 5.12.2016
(posted on 16.12.2016) to the Petitioner (received on 22.12.2016)
claiming Liquidated Damages (LD) for the delay in completion of the
Project. The Petitioner has submitted that BESCOM in the said letter
has alleged that since there was a delay of 244 days in the declaration
of COD of the Elements, the Petitioner has to pay LD to all the LTTCs in
proportion, as per Schedule-! of the TSA within 10 days, failing which
the action would be initiated as per TSA i.e. invocation of Performance
Guarantee. According to the Petitioner, the said letter of BESCOM dated
5.12.2016 is illegal, unwarranted, abuse of dominant position of the
Respondents and is without any basis. The Petitioner has stated that
the said letter is an attempt of BESCOM to unjustly enrich itself at the
cost of the Petitioner. The Petitioner has also pointed out that the letter
of BESCOM has inherent contradictions for the following reasons:
(i) While the first paragraph of the letter states that the construction
of Element 2 and 3 are still not complete, the later para computes
a delay of 244 days in completion of the construction of the
Project.
(ii) It is settled law that the compensation for breach of contract can
be awarded to the innocent party only in the event such party
actually suffering a loss. Damages cannot be recovered to unjustly
enrich from an alleged breach of a contract.
76. In addition, the Petitioner has submitted that more than two
months after being communicated about the commercial operation of
the entire project, BESCOM has raised a frivolous demand without
giving any details as to how the delay was calculated. It has also
submitted that the right to claim liquidated damages for delay in
completion of the Project cannot be seen in isolation and TSA has to be
read as a whole. The Petitioner has further stated that the entitlement
of LDs in the event of delay in completion can be invoked only if the
LTTC have complied with their obligations under the TSA. It has pointed
out that the primary reason for delay was the non-availability of inter-
connection facility which is the sole responsibility of the Respondents.
The Petitioner has further submitted that as per Article 6.5.2 of the
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TSA, the Petitioner is entitled to return of the Bank Guarantee (BG)

within 3 months of the commercial operation of the Project and since
the COD of Element 2 was achieved on 19.9.2016, the BG should have
been released on or before 19.12.2016. Accordingly, the Petitioner has
prayed to set aside the letter dated 5.12.2016 of BESCOM and for
return of the BGs furnished by the Petitioner.
77. The Respondent, BESCOM has submitted that since the
Petitioner had not achieved COD within the timeframe stipulated under
the TSA, it is required to pay LD as per Article 6.4 of the TSA. The
Respondent has further submitted that being a public company, it is
entitled LD for belated execution of the Project by the Petitioner.
BESCOM has added that the Petitioner is entitled to return of BG only if
it has achieved COD within the timeframe stipulated in the TSA. The
Respondent, BESCOM has stated that the relief sought for by the
Petitioner is not in accordance with the terms of the TSA entered into
with the LTTCs, or the orders of this Commission or the law laid down
by the Supreme Court and hence the Petition is liable to be dismissed.
KSEBL has submitted that due to the delay in execution of the Project,
the Petitioner is liable to pay LD to the LTTCs for the delay in proportion
to their respective allocations as per Article 6.4.1 of the TSA. KSEBL has
also stated that in terms of Article 6.5.1 of the TSA, if the TSP fails to
achieve COD of any of the elements on their respective scheduled COD
specified in this Agreement, subject to conditions mentioned in Article
4.4, the LTTCs shall have the right to encash the Contract Performance
Guarantee (CPG) and appropriate in their favour as LD an amount
specified in Article 6.4.1, without prejudice to the other rights of the
LTTCs under this Agreement. The Petitioner has clarified that the LTTCs
cannot take advantage of their failure to provide the interconnection
facility etc., in terms of the TSA and impose LD and encash the CPG by
alleging breach of contract on the part of the Petitioner.
78. We have considered the submissions of Petitioner and
Respondents. Articles 6.4 and 6.5 of TSA provides as under:
“6.4 Liquidated Damages for Delay in achieving COD of Project:
6.4.1 If the TSP fails to achieve COD of any Element of the Project
or the Project, by the Element's/Project's Scheduled COD as
extended under Articles
4.4.1 and 4.4.2, then the TSP shall pay to the Long Term
Transmission Customer(s), as communicated by the Lead Long Term
Transmission Customer, in proportion to their Allocated Project
Capacity as on the date seven (7) days prior to the Bid Deadline, a
sum equivalent to 3.33% of Monthly Transmission Charges
applicable for the Element of the Project [in case where no Elements
have been defined, to be on the Project as a whole]/Project, for each
day of delay up to sixty (60) days of delay and beyond that time
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limit, at the rate of five percent (5%) of the Monthly Transmission

Charges applicable to such Element/Project, as liquidated damages
for such delay and not as penalty, without prejudice to Long Term
Transmission Customers' any rights under the Agreement.
6.5 Return of Contract Performance Guarantee
6.5.1 If the TSP fails to achieve COD of any of the Elements on
their respective Scheduled COD specified in this Agreement, subject
to conditions mentioned in Article 4.4, the Long Term Transmission
Customers shall have the right to encash the Contract Performance
Guarantee and appropriate in their favour as liquidated damages an
amount specified in Article 6.4.1, without prejudice to the other
rights of the Long Term Transmission Customers under this
Agreement.
6.5.2 The Contract Performance Guarantee as submitted by TSP in
accordance with Article 3.1.1 shall be released by the Long Term
Transmission Customers within three (3) months from the COD of
the Project. In the event of delay in achieving Scheduled COD of any
of the Elements by the TSP (otherwise than due to reasons as
mentioned in Article 3.1.1 or Article 11) and consequent part
invocation of the Contract Performance Guarantee by the Long Term
Transmission Customers, the Long Term Transmission Customers
shall release the Contract Performance Guarantee if any, remaining
unadjusted, after the satisfactory completion by the TSP of all the
requirements regarding achieving the Scheduled COD of the
remaining Elements of the Project. It is clarified that the Long Term
Transmission Customers shall also return/release the Contract
Performance Guarantee in the event of (i) applicability of Article
3.3.2 to the extent the Contract Performance Guarantee is valid for
an amount in excess of Rupees forty one crore forty lacs (Rs. 41.4
Cr) or (ii) termination of this Agreement by any Party as mentioned
under Article 3.3.4 of this Agreement.
6.5.3 The release of the Contract Performance Guarantee shall be
without prejudice to other rights of the Long Term Transmission
Customers under this Agreement.
79. In terms of Article 6.5.1 of the TSA, if the TSP fails to achieve
COD of any of the elements on their respective scheduled COD specified
in this Agreement, subject to conditions mentioned in Article 4.4, the
LTTCs shall have the right to encash the Contract Performance
Guarantee (CPG) and appropriate in their favour as LD an amount
specified in Article 6.4.1, without prejudice to the other rights of the
LTTCs under this Agreement. However, the petitioner has relied on
Article 6.5.2 of the TSA and contended that the CPG submitted by in
accordance with Article 3.1.1 shall be released by the LTTCs within
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three (3) months from the COD of the Project.

80. As stated, the SCOD of Elements 2 and 3 was 31.12.2015 and
the actual COD of the Elements 2 and 3 are 19.9.2016 and 27.7.2016
respectively. The Respondent, BESCOM vide letter dated 5.12.2016 had
requested the Petitioner to pay LD to all the LTTCs since there was a
delay of 244 days and the project could not be completed within the
SCOD of 31.12.2015 as per TSA. The contents of the said letter are
extracted hereunder:
“Sir,
Sub: Execution of Transmission System required for evacuation of
Power
from Kudgi TPS by M/s. L&T IDPL -reg delay in achieving COD
Ref: 1. L&T Letter No.: KTL: LTTC: 2016–17: 012 dated:
10.5.2016
2. CEA minutes of the meeting No. CEA/PS/PSPM/7/72016/962-
973
dated:22/23.6.2016
3. L&T Letter No.: KTL: LTTC: 2016–17: 015 dated: 05-07-2016
4. L&T Letter No.: KTL: LTTC: 2016–17: 016dated: 27.7.20.16
5. PCKL vide letter PCKL/A3/Al/26/2005–06/2270-75 dated:
25.7.2016.
Inviting reference to the above subject, according to Schedule-3
of TSA, Element-2 and Element-3 was supposed to be completed by
31.12.2015. Due to Right of way issues these elements are not yet
completed.
M/s. KTL representative in the meeting held on 17.6.2016
informed that Element-3 and Element-2 would be completed by end
of June 16 and July-16 respectively.
Further, as per Article 6.4.1 of TSA provides that, if the
Transmission Service Provider (TSP) fails to achieve COD of any
Element of the Project,
6.4.1 Then the TSP shall pay to the Long Term Transmission
Customers(s), as communicated by the Lead Long Term
Transmission customer in proportion to their Allocated Project
Capacity on the date seven (7) days prior to the Bid Deadline, a sum
equivalent to 3.33% of Monthly Transmission Charges applicable for
the Element of the Project [in case where no Elements have been
defined, to be on the project as a whole]/project, for each day of
delay up to sixty (60) days of delay and beyond that time limit, at
the rate of five percent (5%) of the Monthly damages for such delay
and not as penalty, without prejudice to Long Term Transmission
Customers' any rights under the Agreement.
6.4.2 The TSP's maximum liability under this Article 6.4 shall be
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limited to the amount of liquidated damages calculated in

accordance with Article 6.4.1 for and up to six (6) months of delay
for the Element or the Project. Provided that in case of failure of the
TSP to achieve COD of the Element of the Project even after the
expiry of six (6) months from its scheduled COD, the provisions of
Article 13 shall apply.
6.4.4 If the TSP fails to pay the amount of liquidated damages
within the said period of ten (10) days, the Long Term Transmission
Customers shall be entitled to recover the said amount of the
liquidated damages by invoking the contract Performance Guarantee.
If the then existing Contract Performance Guarantee is for an amount
which is less than the amount of the liquidated damages payable by
the TSP to the Long Term Transmission Customers under this Article
6.3, the TSP shall be liable to forth with pay the balance amount.
As per schedule-8 of TSA, it is the right and obligation of Lead
Long Term Transmission Customer to communicate with the TSP on
imposition of liquidated damages.
As per TSA signed on 14.5.2013, the transmission line has to be
commissioned before 31.12.2015. There is considerable delay of 244
days.
Therefore, you are requested to pay LD to all the LTTCs in
proportion to their share as per Schedule-1 of TSA within 10 days
failing which the action as per provision of TSA will be initiated.
Yours faithfully,
General Manager (Elec)
PP, BESCOM
81. We have in this order decided that the (i) non-availability of the
required inter-connection facilities by PGCIL (ii) Law & Order issues in
various villages, including the districts of Tumkur, Ramanagara and
Bellary etc., and (iii) denial of approval by KIADB for undertaking works
on lands notified by KIADB are force majeure events which caused
delay in the execution and completion of Elements 2 and 3 by the
Petitioner. Also, in the light of the force majeure events affecting the
performance of the obligations, we have held in para 75 above that the
Petitioner is entitled for revision in the SCOD of Elements 2 and 3 from
31.12.2015 till the dates of actual COD of these elements, in terms of
Article 4.4.2 of the TSA. In this background, the demand made by
BESCOM vide letter dated 5.1.2016 requesting the Petitioner to pay the
LD amount to all the LTTCs in proportion to their share as per Schedule-
1 of TSA due to delay in completion of the Project, is not sustainable in
law. Accordingly, the letter of BESCOM dated 5.12.2016 is set-aside.
Consequent upon this, the LTTCs are directed to return the Contract
Performance Guarantee submitted by the Petitioner, within 15 days
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from the date of this order.

82. We had vide ROP of the hearing of this Petition on 3.1.2017,
disposed of IA 64/2016 by directing the Petitioner to submit a BG of Rs
4.3 crore in favour of BESCOM (or the amount as may be calculated as
LD by BESCOM for the delay) for a period of six months and the same
was directed not to be encashed by BESCOM, without seeking
permission of the Commission. The said BG has not been encashed by
BESCOM. Accordingly, the BG submitted by the Petitioner in terms of
our directions shall also be returned by BESCOM to the Petitioner,
within 15 days from the date of this order.
83. Petition No. 248/MP/2016 is disposed of in terms of above.
———
† New Delhi Bench

‡ In the matter of

Petition to set aside the demand letter dated 5.12.2016 issued by Bangalore Electricity
Supply Company Ltd and for a declaration that Kudgi Transmission Limitedis entitled for day
to day extension of Scheduled COD for Elements 2 and 3 due to non-availability of
interconnection facilities and for delay in handing over land notified by KIADB.

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