Electricity: Supply under Open Access System – PPA between appellant and respondent no.1 – State Commission did not accord approval to the PPA and returned the same – Appellant filed O.P. before State Commission seeking declaration that no valid PPA subsisted between them – State Commission dismissed the O.P. – Appeal before Appellate Tribunal – During pendency of appeal, appellant sent Letter dated 5.5.2011 to respondent no.1 mentioning the defaults in making payment for power bill and interest and default in opening letter of credit and seeking permission to sell the power to third party – Meanwhile appellant sought to bring subsequent events on record for decision of appeal – Appellate Tribunal examined the subsequent events on merits and ultimately dismissed the appeal holding that no notice to remedy the default or termination notice was served by appellant on the respondent no.1 – On 11.5.2012, appellant sent notice of termination – Respondent no.1 made certain payments and also opened letter of credit and thereafter filed O.P. before State Commission seeking declaration that termination of PPA by appellant was invalid – On 9.5.2013, Central Commission asked appellant to approach State Commission for adjudication of dispute regarding subsistence or otherwise of the PPA after the termination notice dated 11.05.2012 – O.P. by respondent was allowed by State Commission by order dated 17.3.2017, on the ground that notice dated 5.5.2011 was not a default notice and therefore subsequent notice of termination based upon 5.5.2011 notice could not be said to be valid in law – Appellate Tribunal dismissed appeals of appellant filed against order dated 9.5.2013 and 17.3.2017 – In the instant appeals, plea of appellant inter alia was that finding based on letter dated 5.5.2011 by Appellate Tribunal was not on a matter directly and substantially in issue but being merely collateral could not be said to be res judicata – Held: There is no doubt whatsoever that the appellant itself invited the Appellate Tribunal to go into a subsequent event, which, according to it, was of extreme importance in deciding the appeal – This being the case, after contest, and after the Appellate Tribunal held in favour of the appellant that such subsequent event was indeed important and will be decided by the Tribunal, and then suffering a finding which was found, on merits, to be against it, the appellant was clearly estopped from attempting to argue now that the very important issue raised by way of subsequent events according to the appellant itself should be held, as a matter of law, to be only a collateral issue and therefore, not res judicata – A reading of PPA showed that upon occurrence of an event of default, a default notice may be served to the Corporation in writing specifying in reasonable detail the event of default giving rise to the notice, and calling upon Respondent No.1 to remedy the same within a period of 30 days from the delivery of the default notice unless the parties have agreed otherwise – It is only then that the Company may deliver a termination notice to the Corporation – Letter dated 05.05.2011 spoke only of events of default, but did not call upon Respondent No.1 to remedy the same within the period specified – Thus there was no substantial compliance of Clause 9.3.2 of the PPA – Appellate Tribunal in the impugned judgment cannot be faulted on any score. Dismissing the appeals, the Court
HELD: 1. Once a Court or Tribunal decides to look into a subsequent event at the behest of any of the parties, the Court itself thinks that it is important to do so, otherwise it would not look into such subsequent event. As seen from the Appellate Tribunal’s judgment, not only did the appellant considered the subsequent event as directly and substantially in issue for deciding the appeal, which incidentally was not opposed by Respondent No.1 on this ground but on the ground that it would be bringing in a new issue at the stage of appeal, but the Appellate Tribunal having turned down the Respondent No.1’s plea, and having examined subsequent events, it cannot but be said that the Appellate Tribunal itself considered the issue No.3 raised by it, based on subsequent events brought to its notice, as being directly and immediately in issue. On this ground also, therefore, apart from the appellant being estopped in law from raising such a plea, the plea itself has no legs to stand down. [Paras 13, 15] [1000-F-H; 1031-G-H; 1032-A-C]
2. A reading of clause 9.3.2 of the PPA would show that upon occurrence of an event of default, a default notice may be served to the Corporation in writing. The requirements of the said notice are two fold – (1) to specify in reasonable detail the event of default giving rise to the notice, and (2) calling upon Respondent No.1 to remedy the same within a period of 30 days from the delivery of the default notice unless the parties have agreed otherwise. It is only then that the Company may deliver a termination notice to the Corporation. Letter dated 05.05.2011 spoke only of events of default, but did not call upon Respondent No.1 to remedy the same within the period specified. This, according to the appellant was in any event substantial compliance with the said clause. Both parts of Clause 9.3.2 are important one specifying in reasonable detail the event of default and the second, calling upon Respondent No.1 to remedy the same within a period of 30 days. The parties may otherwise agree, in which case the Respondent No.1 may remedy the defaults mentioned in the notice either before or after the expiry of 30 days period laid down, showing that the parties considered that this part of Clause 9.3.2 is as important as the first part, for otherwise, a termination notice could, de hors the second part of Clause 9.3.2 have issued straight away without more. This being the case, submission that there has been substantial compliance of Clause
9.3.2 of the PPA is not tenable. [Paras 16, 17, 21] [1032-C-D; 1033-B-C]
Pasupuleti Venkateswarlu v. The Motor & General Traders [1975] 3 SCR 958 ; Sajjadanashin Sayed Md. B.E. EDR (D) by LRs. v. Musa Dadabhai Ummer and Others (2000) 3 SCC 350 : [2000] 1 SCR 1095 – relied on.
Nani Gopal Biswas v. the Municipality of Howrah [1958] SCR 774 ; Thakur Pratap Singh v. Shri Krishna Gupta and Others [1955] 2 SCR 1029 – Distinguished.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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