Rerc order ppa cancellation petition no 265

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Rajasthan Electricity Regulatory Commission
Petition No. RERC- 431/13
In the matter of Petition filed by Rajasthan Rajya Vidyut Prasaran Nigam Ltd.
(RVPNL) for adoption of tariff and approval of deviation regarding procurement
of 1000 MW power through case-I bidding.
Coram: Shri Vishvanath Hiremath, Chairman
Shri Vinod Pandya, Member
Shri Raghuvendra Singh, Member
Petitioner : Rajasthan Rajya Vidyut Prasaran Nigam Ltd.
Respondents :
1. Jaipur Vidyut Vitran Nigam Ltd., Jaipur
2. Ajmer Vidyut Vitran Nigam Ltd., Ajmer
3. Jodhpur Vidyut Vitran Nigam Ltd., Jodhpur
4. Secretary, Govt. of India, MoP, New Delhi
5. Secretary, Govt. of Rajasthan, Deptt. of Energy, Jaipur
6. M/s PTC India Ltd., New Delhi.
7. M/s. Maruti Clean Coal & Power Ltd., Raipur.
8. M/s. D.B.Power Ltd., Bhopal.
9. M/s. Lanco Power Ltd., Gurgaon.
10. M/s. SKS Power Generation (Chhatisgarh) Ltd., Mumbai.
11. M/s. Athena Chhatisgarh Power Ltd., Hyderabad.
Presents:
1. Sh. L.L.Gupta, Advocate for Petitioner
2. Sh. Bipin Gupta, Advocate for Discoms
3. Sh. Sanjay Sen, Advocate for D.B.Power Ltd., Bhopal.
4. Sh.Akhil Sibal, Advocate for Lanco Power Ltd., Gurgaon
5. Sh. Atul Shanker Mathur, Advocate for SKS Power
Generation (Chhatisgarh) Ltd., Mumbai
6. Sh. Ravi Chirania, Advocate for Maruti Clean Coal &
Power Ltd., Raipur.
7. Sh. Angad Mirdha, Advocate for Athena Power Ltd.,
Hyderabad.
8. Sh. Ravi Kishore, Advocate for PTC

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Date of Order: 22.07.2015
ORDER
1. The petitioner Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (RVPN) has filed
this petition on behalf of Discoms for adoption of tariff and approval of
deviation regarding procurement of 1000 MW power through case-I bidding
process.
2. RVPN in its petition has submitted that:
(i) It has been authorized by the Discoms of the State (the “Procurers”) to
undertake the bidding process for selection of Seller(s) for procurement
of 1000 MW ± 10%) base load power under ‘Case 1’ of the “Guidelines
for Determination of Tariff by Bidding Process for Procurement of Power
by Distribution Licensees” issued by Ministry of Power to meet their load
requirements.
(ii) Global invitation for Request for Proposal (RFP) for selection of Seller(s), in
line with the Standard Bid Documents (SBD) issued by MoP, was invited in
leading National Newspapers and International Newspaper. The last
date for submission of bids was kept as 3.8.2012. The RFP came to be
revised at the request of the prospective bidders and final RFP was issued
on 3.8.2012. The last date of submission of bid was rescheduled for
18.9.2012.
(iii) As per clause 5.9 of the Guidelines, a committee, with one member
external to the procurer's organization and affiliates having expertise in
financial matters/ bid evaluation, was constituted by the RVPN for
evaluation of the bids. The Evaluation Committee comprised of the
following members:
i. The Chief Engineer (NPP-R), RVPN
ii. The Chief Engineer (Commercial), JVVNL
iii. The Chief Engineer (RDPPC)
iv. The Chief Controller of Accounts, RVPN
v. The Dy. Chief Engineer (PPC&F), RVUN
vi. Shri Tarun Agarwal, CA, (Partner of M/s Shyam Lal Agrawal & Co.,)

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Jaipur.
(iv) As per the RFP, the bidders were to submit their bids for the requisitioned
capacity of 1000 MW ± 10% with a minimum bid Capacity of 100 MW.
(v) Eight interested parties purchased the RFP documents, out of which only
the following seven bidders submitted their bids within the due date:
S.
No.
Bidder Name
Capacity
Offered
(MW)
1 Jindal Power Limited 300
2 KSK Mahanadi Power Company Limited 475
3 SKS Power Generation (Chhattisgarh) Limited 100
4 RKM Powergen Pvt. Ltd. 600
5 NSL Nagapatnam Power & Infratech Limited 100
6 Lanco Power Limited 300
7 PTC India Limited (which has bid from
following developers)
1041
(a) Adhunik Power and Natural Resources Limited 135
(b) Maruti Clean Coal and Power Limited 195
(c) MB Power (Madhya Pradesh) Limited 200
(d) DB Power Limited 311
(e) Athena Chhattisgarh Power Limited 200
(vi) Bid Evaluation Committee (BEC) vide its meeting dated 27.12.2012 and
11.1.2013 declared all bidders qualified for opening of their financial bids.
(vii) As M/s NSL Nagapatnam Power & Infratech Limited and M/s RKM
Powergen Pvt. Ltd. did not extend their bid validity, only financial bid of
following five bidders were opened on 4.4.2013 in the presence of the
representatives of the bidders.
S.
No.
Bidder Name
Capacity
Offered (MW)
1 Jindal Power Limited 300
2 KSK Mahanadi Power Company Limited 475
3 SKS Power Generation (Chhattisgarh) Limited 100
4 Lanco Power Limited 300
5 PTC India Limited (which has bid from
following developers)
1041
(a) Adhunik Power and Natural Resources Limited 135
(b) Maruti Clean Coal and Power Limited 195
(c) MB Power (Madhya Pradesh) Limited 200
(d) DB Power Limited 311
(e) Athena Chhattisgarh Power Limited 200

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(viii) Evaluation of financial bid was discussed in meeting of BEC held on
17.4.2013 and 22.4.2013 and the order from lowest to highest levelized
tariff evaluated by BEC is as follows:
Rank Qualified Bidder Name
Levelized
Tariff
(Rs/kWh)
Capacity
Offered
Cumulative
Capacity
Offered
Average
Cumulative
Tariff
(Rs/kWh)
L-1 PTC – Maruti Clean Coal
and Power Limited
4.517 195 195 4.517
L-2 PTC – DB Power Limited 4.811 311 506 4.698
L-3 LPL – Lanco Babandh
Power Limited
4.943 100 606 4.738
L-4 PTC – Athena Chhattisgarh
Power Limited
5.143 200 806 4.839
L-5 SKS Power Generation
(Chhattisgarh) Limited
5.300 100 906 4.890
L-6 LPL – Lanco Vidarbha
Thermal Power Limited
5.490 100 1006 4.949
L-7 PTC – MB Power (Madhya
Pradesh) Limited
5.517 200 1206 5.043
L-8 KSK Mahanadi Power
Company Limited
5.572 475 1681 5.193
L-9 Jindal Power Limited 6.038 300 1981 5.321
L-10 LPL – Lanco Amarkantak
Power Limited
7.110 100 2081 5.407
(ix) Evaluation of the BEC was placed before the Board of Directors of
the RVPN for approval. The BoD decided that matter be referred to
BEC and Consultant appointed for the purpose M/s Deloitte Touche
Tohmatsu India Pvt. Ltd. to suggest whether negotiation should be
held and if yes, then what should be the process to be followed for
such negotiation, keeping in view the capacity offered by each of
the bidders, consumers interest, financial prudence, other
precedents elsewhere in the country and other factors as may be
considered appropriate for the purpose.
(x) BEC in its meeting dated 4.6.2013 recommended that negotiations
may be held owing to the following :-
1) Capacity offered by various bidders varies from 100 MW to 475 MW
and more than one bidder needs to be selected to fulfil the
Requisitioned Capacity, i.e., 1000 MW.

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2) It is in the interest of consumers of the State if tariff is lowered
through negotiations. Further looking to the long term impact and
quantum of the amount involved, negotiation with the bidders
may result in lowering tariff payable by Discoms which may in-turn
benefit the Discoms and the end consumers.
3) The negotiations may be done in a transparent manner, following
the ethics of the bidding procedure, resulting in lowering of quoted
tariff and would not hamper the financial prudence.
4) Despite provision of clause 3.5.9 in the Standard RFP, negotiations
were held in following cases as mentioned in Tariff Adoption order
of respective State Electricity Regulatory Commissions:
1. GUVNL Case 1: GERC order dated 20.12.2007
2. MSEDCL Case 1: MERC order dated 14.08.2008
3. RVPN Case 1 for Rajasthan’s Discoms: RERC order dt. 31.05.2010
4. MSEDCL Case 1: MERC order dt. 28.12.2010
5. GUVNL Case 1: GERC order dated 23.08.2011
(xi)In the meanwhile the matter was referred to the State Govt. vide
letter dated 2.9.2013 for seeking exemption under the Rajasthan
Transparency in Public Procurement Act, 2012 read with Rajasthan
Transparency in Public Procurement Rules, 2013. On receipt of
response from the Finance Deptt., GoR, BoD decided that L-1 bidder,
viz., M/s PTC India Ltd. who have offered through their Developer M/s
Maruti Clean Coal & Power Ltd. for 195 MW at the levelised tariff of
Rs. 4.517 per kWh be called in next Board meeting for negotiation. L-1
bidder M/s PTC India Ltd. and their Developer M/s Maruti Clean Coal
& Power Ltd. during the meeting offered an additional quantum of 55
MW of power at their already quoted tariff. The Board considering the
offer decided to issue LoI to L-1 bidder for procurement of 195 MW
power at the levelised tariff of Rs. 4.517 per kWh and decided to call
L-2 bidder for negotiations.

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(xii) The Board in its meetings held on 20th, 24th and 25th Sept., 2013
negotiated with L-2 and L-3 bidders, viz., M/s PTC India Ltd. and their
Developer M/s DB Power Ltd. and M/s Lanco Power Ltd. for
generation source M/s Lanco Babandh Power Ltd. The bidders
unilaterally offered to supply an additional quantum of 99 MW and
250 MW respectively at their quoted/ reduced tariff. M/s Lanco
Power Ltd. unilaterally offered a rebate of 5 paisa per kWh each year
in their quoted non escalable capacity charges for the full term of
the PPA. The Board after considering the offer made during
negotiation decided to issue LoI for additional 55 MW of power to M/s
PTC India Ltd. through their Developer M/s Maruti Clean Coal and
Power Ltd., LoI for 410 MW (311 MW plus additional 99 MW) of power
to M/s PTC India Ltd. through their Developer M/s DB Power Ltd. and
LoI for 350 MW (100 MW plus additional 250 MW) of power to M/s
Lanco Power Ltd.
(xiii) LoIs were accordingly issued to M/s PTC India Ltd. for supply of
additional 55 MW power through their developer M/s Maruti Clean
Coal and Power Ltd. and for supply of 410 MW power through their
developer M/s DB Power Ltd. LoI was also issued to M/s Lanco Power
Ltd. for supply of 350 MW power from their generation source M/s
Lanco Babandh Power Ltd. which have been duly acknowledged.
(xiv) In compliance of provisions of Clause 6.1 of the Guidelines, the
Power Purchase Agreements (PPAs) were also signed between the
Procurers and Successful Bidders on 1.11.2013. Further, in compliance
of provisions of clause 6.2 of the Guidelines, the certification on
conformity of the bid process evaluation by the Bid Evaluation
Committee and Certification on conformity of the bid process to the
Guidelines by the Procurers has been submitted by RVPN along with
the petition.

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(xv) The bidding process (from date of issue of RFP on 28.5.2012 to
signing of PPA on 1.11.2013) has been completed and has taken 523
days. As per Clause 5.19 of the Guidelines, approval of Commission is
required in case the bid process takes more than 195 days. Primarily,
the reasons for delay beyond 30.9.2013 are on account of revision in
the RFP as requested by the prospective bidders and reference to
the State Govt. regarding applicability of Rajasthan Transparency in
Public Procurement Act, 2012 and Rajasthan Transparency in Public
Procurement Rules, 2013 and reference to BEC regarding issue of
negotiations.
(xvi) It is submitted that Board of Directors has approved procurement of
additional quantum of power from successful bidders at their quoted
/ reduced tariff which results in reduction of average tariff by 18 paisa
per unit which in turn results in saving of Rs. 4007 crores to all procurer
Discoms. As it would be in the interest of the State to procure the
additional quantum of power offered by the successful bidders, it is
humbly submitted to approve the same.
(xvii)In view of the facts and circumstances mentioned above, It is
prayed:
(a) to approve the extended time line of 523 days for the bid
process, i.e., 328 days beyond the maximum period of 195 days
allowed under clause 5.19 of the Guidelines.
(b) to issue order in terms of Section 63 of the Electricity Act 2003 for
adoption of tariff obtained through the bidding process from
1) M/s PTC India Ltd (through developer M/s Maruti Clean Coal &
Power Limited)
2) M/s PTC India Ltd (through their developer M/s DB Power Limited)
3) M/s Lanco Power Limited (Generation Source- M/s Lanco
Babandh Power Limited) (with reduction of 5 paisa per kWh).
(c) Approve procurement of additional quantum of power from the
successful bidders at their quoted tariff on the same terms &
conditions (including rebate of 5 paisa per kWh each year in the

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quoted non escalable capacity charges for full term of the PPA
by M/s Lanco Power Ltd.)
3. When the matter was taken for consideration it was brought to the notice
of the Commission that selection of three bidders for award of supply of
power, and issuance of LOI in their favour has been challenged before the
Hon’ble High Court of Rajasthan in SB Civil Writ petition No.18699/13 and SB
Civil Writ Petition No.19437/13 filed by SKS Power Generation (Chhattisgarh)
Ltd. and Athena Chhattisgarh Power Ltd & Others.
4. The Hon’ble High Court of Rajasthan, on 07.02.2014 disposed of the above
writ petitions with the following directions:
“1. The petitioners have alleged violation and deviation from the RFP
and the Bidding Guidelines of 2005, which may then be considered
and decided by the Rajasthan Electricity Regulatory Commission
(RERC) after providing an opportunity of hearing to the petitioners
though objection regarding locus in respect of petitioner –Athena
Chhattisgarh Power Limited has been raised but it is not of substantial
nature at this stage as the issues would otherwise be determined by the
Commission in reference to the petitioner SKS Power Generation
(Chattisgarh) Ltd. The respondents have agreed not to raise objection
for hearing of the petitioners before the Commission.
2. The Commission would consider and decide the allegation of
deviation and violation of the RFP and the Bidding Guidelines of 2005.
While determining the issues, it would exercise power as given under
the Act of 2003 and pass necessary order as deem fit in the facts and
circumstances of the case.
3. The letters of intent (LOI) shall remain subject to final outcome of the
order of the Commission.
4. The Commission would take a proper decision in the matter after
considering all the aspects and while doing so, it will take care of the
objects of the Bidding Guidelines of 2005 for determination of tariff.”
5. The above judgment of the learned Single Judge of the Hon’ble High Court
was challenged by the appellants before the Division Bench in DB Special
Appeal No.604/2014. Hon’ble Division Bench vide its order dated 18.04.2014
upheld the order of learned Single Judge and dismissed the appeals.

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6. M/s Athena Chhatisgarh Power Ltd & others have filed SLP No.12325 of 2014
& SLP (C) No.12548 of 2014 before Hon’ble Supreme Court of India
challenging the order of the Hon’ble High Court. The Hon’ble Supreme
Court vide its order dt. 09.05.2014 issued notices to Respondents but
granted no interim order. Further, Hon’ble Supreme Court vide its order dt.
08.10.2014 has passed the following order:
“---------------The Letters of Intent (LOIs) issued by respondent no.2 in favour of
respondent nos.3-6, which is the subject matter of these Petitions, is subject to the
result of these Special Leave Petitions.
The pendency of the Special Leave Petition(s) will not come in the way of the
appropriate Commission in proceeding to pass appropriate orders after hearing
the parties in the Writ petition.”
7. In view of the above orders, Commission has held further hearing in the
matter.
8. Chandelao Vikas Sansthan, Chandelao, an NGO, has filed an Interlocutory
Application No.1 of 2014 for impleading it in the petition filed by RVPN for
adoption of tariff obtained through bidding process. M/s Lanco Power Ltd.
and M/s DB Power Ltd. also filed Interlocutory Applications No. 2 and 3 of
2014 respectively to implead them as necessary party to the present
petition.
9. In its application, Chandelao Vikas Sansthan, Chandelao has submitted
that it is based in Rajasthan and is focusing on social and environmental
consumer issues of Rajasthan Discoms. It is further submitted by the
applicant that in the matter relating to adoption of tariff obtained through
the bids by RRVPNL, it should be impleaded as a party to the petition, as it
desires to submit on how RRVPNL has violated the bidding guidelines issued
by Government of India, while issuing the Letter of Intent (LOI), to the three
companies namely PTC India Ltd., for Maruti Clean Coal & Power Ltd.,
D.B.Power Ltd. and Lanco Power Ltd. and how purchase of power as per
LOI, will affect its interest as a consumer.

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10. RVPN also filed an application for impleading the generating companies as
parties in the interest of justice and transparency, as it would be
appropriate to implead all the parties involved in the cases before the
Hon’ble Rajasthan High Court, Jaipur bench in the SB Civil Writ Petition
18699/2013, SB Civil Writ Petition No.19437/2013 filed by M/s SKS Power
Generation Ltd. and M/s Athena Chhattisgarh Power Ltd. respectively, who
are unsuccessful bidders.
11. The above Interlocutory Applications were heard on 24.04.2014 by the
Commission.
12. The Commission vide its order dated 08.05.2014 disallowed the application
of Chandelao Vikas Sansthan to be impleaded as a party. However,
Commission allowed the application filed by the RRVPNL for impleading (1)
M/s.PTC India Ltd. (2) Maruti Clean Coal & Power Ltd., (3) DB Power Ltd. (4)
Lanco Power Ltd. (5) SKS Power Generation (Chhatisgarh) Ltd. (6) Athena
Chhatisgarh Power Ltd. and directed the petitioner to amend the petition
and the cause title and include proposed parties in the petition as parties
and also to serve copies of its petition to all the impleaded parties, to
enable them to file their submissions.
13. Athena Chhattisgarh Power Ltd and SKS Power have filed their objections to
petition on 30.07.2014 and 31.7.2014 respectively. Lanco Power Ltd. has
filed its rejoinder to the objections filed by Athena Chhattisgarh and SKS
Power Ltd. on 12.08.2014 & 23.09.2014 respectively. DB power filed its
counter affidavit to the petition and to the reply of Athena Chhattisgarh
Power Ltd on 13.08.2014 and 26.09.2014 respectively. DB Power has also
filed its reply to the objection raised by SKS Power Generation on 6.11.2014.
M/s Maruti Clean Coal & Power Ltd. filed counter affidavit on 10.11.2014.
14. On 27.11.2014 RVPN filed an application. under regulation 7 of RERC(Power
Purchase & Procurement Process of Distribution Licensee)Regulations, 2004
praying for allowing it to purchase only 500 MW of power as against 1000

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MW for which adoption petition is filed. In the application RVPN had
submitted that the Energy Assessment Committee constituted by the Govt.
of Rajasthan under Regulation 3 (3) of the RERC (Power Purchase &
Procurement Process of Distribution Licencee) Regulations, 2004 vide its 4th
meeting held on 29.1.2014 has come to the conclusion that there is no
requirement for long term procurement of 1000 MW ± 10% power under
Case-1 for which PPAs have been executed and tariff adoption petition has
been filed before RERC. Subsequently, the EAC in its 5th meeting held on
21.05.2014, observed that there is a need to review the decision taken in 4th
EAC meeting held on 29.01.2014. The EAC thus decided to consider
demand of 600 MW on long term procurement of power under Case-I for
which PPAs have been executed and tariff adoption petition has been filed
against the bidding process conducted for 1000 MW. RVPN further
submitted that considering EAC’s recommendation and power
requirements of the state in future, Government of Rajasthan vide its letter
dt. 25.7.2014 has approved to purchase only 500 MW power as against 1000
MW for which bidding process was conducted. Therefore, the Commission
may pass orders for adoption of tariff in the light of the above submissions.
15. Since the application of RVPN dated 24.11.14 for reduction of procurement
was strongly opposed by all the bidders, Commission decided to hear the
IA. Accordingly submissions on IA dated 27.11.2014 were heard. The
Commission vide its order dt. 09.01.2015, held that the application filed by
the petitioner cannot be rejected as not maintainable as contested by the
respondents and needs to be considered on merit along with the main
petition.
16. Therefore, the matter was heard on merit and on all issues finally on
04.02.2015. Sh. L.L. Gupta, Advocate appeared for RVPN, Sh. Sanjay Sen,
Advocate for D.B. Power, Sh. Deepak Khurana, Advocate along with Sh.
Akhil Sibbal, Advocate for Lanco Power Ltd., Sh. Atul Shankar Mathur,

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Advocate for SKS Power Ltd., Sh. Angad Mirdha, Advocate, for Athena
Power Ltd. and Sh. Ravi Chirania, Advocate appeared for Maruti Clean
Coal Ltd.
17. M/s Lanco Power Ltd. and M/s D.B. Power submitted their written
submissions on 02.03.2015 and 03.03.2015 respectively.
18. Sh. L.L. Gupta, Advocate for RVPN has submitted as under:
(i) RRVPNL has filed this petition under 5.16 of "Guidelines for determination of
Tariff by bidding process for procurement of power by distribution
licensees", issued by the Ministry of Power, Government of India, under
Section 63 of the Electricity Act, 2003 for adoption of tariff.
(ii) RRVPNL has conducted the process strictly in accordance with the
Electricity Act, 2003, guidelines and the prescribed procedure. The
allegation of violation, favouritism, etc. are frivolous, baseless and
deserves to be rejected.
(iii) While exercising power under Section 63, the Commission will continue to
be vested with the powers under Section 86(1)(b), which provision vests
the Commission with the jurisdiction to regulate electricity purchase and
procurement process of a distribution licensee.
(iv) Reading of Clause 2.5(c) and 2.17 of RFP clarified that the procurement of
additional quantity of power at the price quoted is permissible and which
under no circumstances can be considered as deviation in process or
modification of the clause 3.5 inter alia requiring approval of amendment
of RFP in terms of the clause 2.3 of the Bidding Guidelines.
(v) There is no bar to either (a) negotiations with a bidder for quantum and/or
grant of additional quantum to bidder offering low rates and/or rates
close to L-1, hence question of violation of procurement process as
alleged does not arise. In support, he cited the decision of Hon’ble APTEL
dated 06.05.2010 in the case of MP Power Trading Company Ltd. Vs
MPERC in appeal no 44 of 2010.

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19. Maruti Clean Coal and Power Ltd. in its submissions supporting the
petitioner’s case contended that:
(a) RRVPNL has filed this petition under 5.16 of "Guidelines for
determination of Tariff by bidding process for procurement of power by
distribution Licensees", issued by the Ministry of Power, Government of
India, under Section 63 of the Electricity Act, 2003 for adoption of tariff.
The Commission is required to decide the petition filed by the RRVPNL
as per the Sections 62, 63, 64, 82, 86 and 94 of Electricity Act, 2003 and
provisions of guidelines. Provisions of the RFP at clauses 3.5.1 to 3.5.9 &
3.5.12 are also very relevant for the issue.
(b) The plain reading of the RFP and all provisions therein do not prescribe
negotiation with any successful bidder for the quantum of power
offered. The clause 3.5.7 clearly provides for the same but it needs to
be approved by this Hon’ble Commission for which the RRVPNL has
made the prayer in the petition. That plain reading of the RFP and all
provisions therein also do not contain a bar and/or a prohibition
whereby the grant of LoI is restricted to the quantum offered by a
bidder. In fact, all provisions read separately and as a whole also do
not lead to any interpretation that the balance requisition capacity
cannot be achieved by issuing LoI for additional quantum over and
above the bid quantity especially if such additional quantity arises
from those bidding the lowest. Clause 3.5 also does not provide by any
interpretation that a qualified bidder offering lower rates for quoted as
well as additional quantity has to be by passed in favour of a bidder
offering quoted quantum at demonstrably higher rate and/or that all
qualified bidders have to be accommodated and granted tender
irrespective of the rate quoted. If such interpretation as suggested by
L4 and L5 is accepted then this would lead to consequences which
would be disastrous mainly for the consumer, for whose benefit the
entire process of the bidding has been designed and the basic object

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of the Act of 2003 would frustrate. Thus, L4 and L5 which have quoted
tariff higher than L1 have rightly not been awarded the contract at
their quoted tariff.
(c) After following the due procedure, the BEC in its minutes of meeting of
4th & 5th meeting evaluated the financial bids in the presence of the
members of the committee. The committee after examining all other
factors examined the levelized tariff for qualified bidders submitted by
the bidders as per the format. As per the quoted table as mentioned in
the minutes of meeting shows that the Maruti Clean Coal was declared
as L1 with quoted levelized tariff as Rs. 4.517.
(d) Thereafter the Board of Directors of RRVPNL in its meeting dated
14.05.2013 decided to refer the matter to BEC to suggest whether
negotiation should be done and what should be the process of such
negotiation. BEC in the meeting held on 04.06.2013 decided that since
the rate quoted by bidders vary considerably as they vary from Rs.
4.517/kWh to 7.110/kWh therefore negotiations may be done as per the
provisions of Rule 69(2)(b) of Rajasthan Transparency in Public
Procurement Rules, 2013 but not on the quoted tariff as specifically
provided in clause 3.5.9.
(e) After receiving the consent of BEC, the Board of the Directors of the
RRVPNL called the L1 bidder, i.e., M/s Maruti Clean Coal Power Ltd.
through PTC India Ltd. for negotiation and requested to reduce the
quoted tariff but the M/s Maruti Clean Coal refused the same. However,
M/s Maruti Clean Coal offered an additional quantum of 55 MW of
power which was accepted at the tariff already quoted in bid offer.
Subsequently, RRVPNL issued the LOI in favour of the M/s Maruti Clean
Coal on 24.09.2013. After accepting the LOI the PPA was executed on
01.11.2013 between the parties.
(f) That the Board of Directors of the RRVPNL conducted similar meetings in
the case of L-2, i.e., M/s DB Power Ltd. and L-3 M/s Lanco Power Ltd.

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Thereafter the Board in its meetings on 20th, 24th and 25th September
approved the allocation of additional quantum of power to the L-1, L-2
& L-3 considering the financial benefits of the Discoms and also the
economic interest of the consumers of the state.
(g) Two bidders, namely L-4, i.e., M/s Athena Chattisgarh Power Ltd. and L-5,
i.e., M/s SKS Power Generation Ltd. whose levelized tariff was much
higher than the present respondent as well as L2 and L3 were dissatisfied
only with the allocation of additional quantum of power. The levelized
tariffs of L-4 & L-5 i.e. Rs. 5.143 and Rs. 5.300 respectively were very high
and any award of the offered quantum of power to them would have
caused huge burden on the consumer as well as the Discoms and
would have been a clear case of undue benefit to them and also
against the guidelines and the law settled by the various Electricity
Regulatory Commissions in respect of determination and adoption of
tariff.
(h) M/s Athena Chattisgarh Power Ltd. and M/s SKS Power Generation
challenged the allocation of additional quantum to L1, L2 and L3 by
filing separate petitions before the Hon'ble Single Judge of Rajasthan
High Court bearing SB Civil Writ Petition No. 19437/2013 and 18699/2013
respectively.
(i) Hon'ble Single Bench of the High Court vide its judgment dated
07.02.2014 refused to grant any indulgence in the matter and dismissed
the writ petitions. Being aggrieved by the order passed by the Hon'ble
Single Bench both L-4 & L-5 filed separate special appeals which were
registered as D.B. Civil Special Appeal (Writ) No. 538/2014 and D.B.
Special Appeal (Writ) No. 604/2014. The Hon'ble Division Bench after
hearing the counsel for L-4 & L-5 at length refused to grant any
indulgence in the judgment dated 07.02.2014 passed by the Hon'ble
Single Judge.

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(j) The above mentioned orders passed by the Hon'ble Single Judge as well
as the Hon’ble Division Bench of the High Court show that on the basis of
frivolous objections, grounds, allegations, the petitions were filed and the
Hon'ble Court refused to interfere. As far as the present respondent is
concerned there cannot be any allegation as the tariff quoted by it was
the lowest and there was big difference in the tariff quoted by the L-2 to
L-5. The additional quantum offered by the applicant was accepted by
the present respondent on the same terms and conditions and the tariff
which shows that no negotiation in respect of tariff was done and the
allocation of additional quantum was clearly for the benefit of the
consumer at large. The RVPNL allocated the additional quantum of
power as per the clause of RFP. Therefore, the allegations regarding
favoritism, etc. are clearly denied and disputed as there are no grounds
to support and prove the allegations.
(k) Reading of Clause 2.5(c) and 2.17 of RFP clarified that the procurement
of additional quantity of power at the price quoted is permissible and
which under no circumstances can be considered as deviation in
process or modification of the clause 3.5 inter alia requiring approval of
amendment of RFP in terms of the clause 2.3 of the Bidding Guidelines.
(l) It is amply clear that there is no bar to either (a) negotiations with a
bidder for quantum and/or (b) grant of additional quantum to bidder
offering low rates and/or rates close to L-1. Therefore, question of
violation of procurement process as alleged does not arise. In fact, if this
was not followed, applicant would have been guilty of breach of trust
reposed in it to procure power at the most reasonable tariffs for
consumers.
(m)A plain reading of the RFP and Bidding Guidelines establish that the
admitted purpose of the tender was to procure power at most cost
effective rate. The tender for requisitioned capacity of 1000 MW was for
meeting the base load requirements of its distribution licensees, for

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further onward supply to its customers, i.e., the people of State of
Rajasthan. Necessarily, both in terms of the Electricity Act and Bidding
Guidelines including the RFP document, it is the interest of the consumers
which is paramount and has to be protected. Accordingly, any
interpretation in subservience of this avowed objective and which in turn
requires power to be purchased at a demonstrably higher price (when
the same can be procured at a lower rate), would be untenable,
opposed to public interest and not permitted by any court of law. The
extra financial burden on the consumer as a consequence of any grant
of LoI to the Respondent no. 10 & 11 (if approved by the RERC) over the
period of the contract would be in thousands of crores.
(n) Above mentioned submissions show that the RRVPNL has conducted the
process strictly in accordance with the Electricity Act, 2003, guidelines
and the prescribed procedure and the allegation of violation, favoritism,
etc. are frivolous and baseless and deserves to be rejected. By way of
this reply, M/s Maruti Clean Coal being the L-1 supports the present
petition filed by the RRVPNL and prays that the petition filed for adoption
of tariff under Section 63 of Electricity Act, 2003 and also for approval of
additional quantity of power allocated to L1, L2 & L3 and also certain
deviations, as mentioned, deserve to be approved and allowed by this
Hon'ble Commission and the objections raised by the L-4 & L-5 i.e. M/s
Athena Chattisgarh Power Ltd. and SKS Power Generation (Chattisgarh)
Ltd. deserve to be rejected at the outset considering the submissions
made by the present respondent.
20. Sh. Sanjay Sen, Advocate for DB Power Ltd. also supported the main
petition and contended as under:
(i) DB Power Ltd. participated in the bid process initiated by RRVPNL for
procurement of 1000 MW ± 10% through the competitive bidding route.
The bid process was initiated on the basis of an express approval of this

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Hon’ble Commission, which approval is recorded in the order dated
23.03.2011 passed in Case No. 205 of 2009.
(ii)DB Power Ltd. had originally bid for a quantum of 311 MW at a levellised
tariff of Rs. 4.811. Petitioner on 19.09.2013 had firstly called L-1 bidder for
discussion in relation of procurement of 195 MW of the 1000 MW power
under Case 1 bidding of the competitive bidding guidelines. While there
was request by the BoD of RVPNL to the L-1 bidder to reduce his tariff, the
same was refused by L-1 bidder. However, such L-1 bidder in good faith
offered an additional quantum of 55 MW at the already quoted tariff as
per the bid offered by them upon completion of the bid process. This
additional quantum was accepted by the Board of the procurer and LOI
for the said additional quantum was subsequently issued. In the meantime
the Board decided to call DB Power, who was L-2. DB Power also did not
agree to any reduction or negotiation in tariff but keeping in view the
interest of the State and in good faith and bonafide reasons offered
additional quantum of power of 99 MW at already quoted tariff. LOI was
issued to DB Power on 27.09.2013 for 410 MW. This was an action fully
permitted under the RFP. In the said minutes it is also recorded that M/s
Lanco Power(L-3) offered a rebate of 5 Paisa per KWH each year in their
quoted escalable capacity charge for the full term of the PPA.
Additionally, Lanco Power offered an additional quantum of 250 MW of
power at the aforesaid reduced tariff. Based on the aforesaid, the Board
after taking in to consideration the financial benefit (of approx Rs 4000
crores) flowing to the Discoms issued LOI to L1 to L3.
(iii) The unsuccessful bidders have questioned the ability of the procurer to
secure additional quantum of power from the lowest bidders, i.e., L-1 to L-
3, and/ or the ability of the Hon’ble Commission to approve the same
under Section 63.
(iv) As per the Section 63 of the Act, the jurisdiction of the Appropriate
Commission is limited only towards adoption of tariff. The Appropriate

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Commission is mandated to compulsorily adopt tariff, if such tariff is
determined by transparent process of bidding in accordance with the
guidelines issued by the Central Government.
(v) At the very outset it needs to be clarified that it is nobody’s case (not even
of the unsuccessful bidders) that jurisdiction under Section 63 should not
be exercised for adoption of tariff that has been discovered in the current
bid process. It is also not their case that “tariff has not been determined
through a transparent process of bidding” in accordance with the
guidelines issued by the Central Government. On the contrary they (the
unsuccessful bidders), whose tariff is much higher than L-1 to L-3, want to
supply power under the bid process after adoption of tariff at a much
higher price. Therefore, it is not a case where there is any allegation that
the process of price discovery/ tariff is vitiated in any manner due to lack
of transparency or otherwise.
(vi) After discovery of price/ tariff through a transparent bidding process, the
procurer proceeded to procure more (additional) power from the first
three lowest bidders at the tariff determined transparently and in
accordance with the bidding guidelines. It is the case of the unsuccessful
bidders that such procurement of additional power is not permitted.
Therefore, this Hon’ble Commission has to recognize that the case put up
by the unsuccessful bidders is not on the issue of lack of transparency. The
allegation of the unsuccessful bidders is that post the transparent process
of tariff discovery, the award of contract to L-1, L-2 and L-3 for additional
quantum was wrongful. On the contrary the case revolves around
interpretation of certain provisions of the competitive bidding guidelines
and the bidding document as to the ability of the procurer to ask the
successful bidders who are L-1 to L-3 to supply more power at the bid
price.
(vii)It is a settled tool of interpretation that in matters of public procurement,
an interpretation that benefits the public at large has to be made. Here is

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a State procurer who has followed the Central Government guidelines for
procurement of electricity on a long term basis. That State procurer’s
initiative has thrown up competitive tariff. The State procurer wants to
maximize public welfare by seeking maximum power at the lowest
possible tariff. In the present case, there is no dispute that the process was
conducted in transparent manner and in accordance with the bidding
guidelines and the RFP. There is no grievance as regards the bid
submissions and the evaluations made by the procurer.
(viii) Paragraph 5.16 of the competitive bidding guidelines permits deviation
from the guidelines. As per the aforesaid paragraph the Appropriate
Commission shall approve the deviations from the guidelines, it is a settled
interpretation of law that the Commission’s power to approve post facto is
also available. Therefore, the Commission can at this stage also approve
any deviation from the guidelines, if required. However, it is clarified that in
the present case there is no deviation from the guidelines at all.
(ix) Under Article 3.5.3 of the standard RFP documents, the bidder with the
lowest levelised tariff is required to be declared as successful bidder for
the quantum of power (in MW) offered by such bidder in such financial
bid. Whereas under Article 3.5.6 the selection process shall stand
completed once the Requisitioned Capacity has been achieved through
the summation of the quantum offered by the Successful Bidders. A
combined reading of Article 3.5.3 and 3.5.6 makes it amply clear that
there is no restriction imposed on the procurer from asking such successful
bidder to supply more quantum than what such bidder has offered in the
financial bid.
(x) Under 3.5.4 the selection process of the successful bidder mentioned in
Clause 3.5.3 is required to be repeated for all the remaining financial bids
of qualified bidders until the entire requisition capacity is met. The question
that will arise is whether Article 3.5.4 vests a right on a qualified bidder who
is lower in the ranking to demand that power from him be compulsorily

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purchased by the procurer when the procurer has the ability to complete
the procurement from bidders who offer lower tariff and have a better
tariff ranking than the bidder offering higher tariff. RFP document does
not give any right to a bidder unless the bid has been accepted by
issuance of LOI. The bidder’s right is limited to a consideration of his offer in
accordance with the RFP process. There is no vested right that a bidder
can claim by virtue of Article 3.5.4.
(xi) Article 3.5.5 of the RFP provided that any step in the process of Clause
3.5.4 in case the requisitioned capacity is not being achieved and the
offered capacity of the bidder with the lowest levelised tariff is larger than
the balance requisitioned capacity, any fraction or combination of
fractions offered by such bidder shall be considered for selection towards
meeting the requisitioned capacity.
(xii) Any interpretation to clauses 3.5.3 to 3.5.12 has to necessarily inure to the
benefit of the consumers in whose interest the Petitioner is procuring the
power. It is the submission of this Respondent that while under Article 3.5.9
there is clear bar/ embargo on negotiation on quoted tariff between the
authorised representative/procurer and the bidder during the process of
evaluation, such embargo does not extend to procurement of additional
quantum from a successful bidder. The reason being that once
competitive tariff has been discovered and the ranking from the lowest to
the highest is made in accordance with Article 3.5.2, then it is up to the
procurer to take the maximum advantage of such competitively
discovered tariff. It is in this context one has to read Article 3.5.3 and 3.5.6
together. Article 3.5.3 requires the successful bidder at the lowest levelised
tariff to compulsorily give the entire quantum offered by such bidder in its
financial bid. The said article locks in the bidder’s offer and does not
permit the bidder after making the offer (in quantum and price) and
declaration of lowest levelised tariff to walk out and/ or reduce its

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quantum. This article secures the procurer to the extent of the quantum of
power offered by such lowest levelised tariff bidder in its financial bid.
(xiii) However, the said article does not restrict such bidder to give more than
the quantum offered if that option is available. It is in this context that
Article 3.5.6 provides that the selection process shall stand completed only
when the requisitioned capacity has been achieved through the
summation of quantum offered by successful bidders or when the
balance of the requisitioned capacity is less than the minimum bid
capacity. Article 3.5.6 does not contemplate a situation where the
selection process is dependent on the available capacity of the qualified
bidders or is limited to the quantum offered in the financial bid. The
qualified bidders who are at the higher level of the price offered cannot
then claim that they have the right to dump their expensive power and
that the procurer has an obligation to purchase such expensive power. If
the procurer is of the view that L-1 to L-3’s tariff is more competitive and
more aligned to the prevailing market prices in accordance with the
principle enunciated in Article 3.5.12, the procurer need not at its
discretion go forward to make any procurement from other qualified
bidders if the first three or four bidders have adequate additional
capacity to meet the requisitioned capacity. This issue was examined at
length by the Hon’ble APTEL in the case of Wardha Power Company Ltd.
v. Maharashtra Electricity Regulatory Commission and Others, Appeal No.
70 of 2013. Therefore, it is submitted that under Article 3.5 of the RFP there
is no embargo for procurement of additional quantum from the lowest
bidders, which procurement will inure to the financial benefit of the
Discoms and the consumers. The embargo is limited to negotiation of
quoted tariff and not for securing additional quantum.
(xiv) On the allegation of antedating of LOI by unsuccessful bidders it is
submitted that BoD in its meetings held on 20th, 24th and 25th September
2013, decided to issue LoI to L-2 & L-3 Bidders for their offered quantity.

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Accordingly, LoI were issued on 24.09.2013 to L-1 Bidder – M/s PTC India
Ltd (through developer M/s Maruti Clean Coal and Power Ltd.). On
27.09.2013, LoI’s was issued to L-2 Bidder– M/s PTC India Ltd and L-3 Bidder
– M/s Lanco Power Limited (Generation Source M/s Lanco Babandh
Power Ltd,). On 27.09.2013, another LoI was issued to L-1 Bidder M/s PTC
India Ltd for additional 55 MW. LoI to L1 Bidder was dispatched vide speed
post on 25.09.2013. LoI’s to L2 and L3 bidder, as well as LoI for grant of
additional quantum to L1 Bidder were dispatched vide speed post on
01.10.2013 as 28.09.2013 and 29.09.2013 being Saturday and Sunday
(Holiday). In view of the aforesaid facts and submissions made all the
aforesaid allegations are denied and disputed.
(xv) Apart from the aforesaid facts, Applicant is seeking the reduction of
quantum of power from 1000 MW to 500 MW for which the bid process
was initiated and consequently LOIs issued/ accepted and PPAs
executed. The Application filed by RRVPNL for reduction in quantum of
power to be procured needs to be dismissed as the present proceedings
(being petition no. 431 of 2013) is limited to adoption of tariff under
Section 63 of the Electricity Act, 2003.
(xvi) In paragraph 4 and 5 of the application, it is submitted on behalf of the
RVPN that in the fifth meeting, the EAC has decided to consider the
demand of 600 MW on long term basis for procurement of power under
Case I, for which PPAs have been executed and tariff adoption petition
has been filed against the bidding process conducted for 1000 MW. Later
in paragraph 6, it is submitted that in light of the EAC’s recommendation
dated 21.05.2014 and considering the requirements, the Government of
Rajasthan vide its letter dated 25.07.2014 has approved purchase of 500
MW power on long term basis against the bid process conducted for 1000
MW.
(xvii) A review of Section 63 will demonstrate that the Appropriate
Commission’s jurisdiction is to adopt tariff if such tariff has been

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determined through transparent process of bidding in accordance with
the guidelines issued by the Central Government. Before going into any
case law of the subject, a plain reading of the provision of law is
warranted. It is submitted on behalf of DB Power Ltd. that the language of
Section 63 is clear and unambiguous. Section 63 compulsorily mandates
that the Hon’ble Commission shall adopt tariff, if such tariff has been
the guidelines. In the aforesaid jurisdictional matrix, there is no scope for
entertaining an application for reduction of procurement quantum. The
procurement quantum is not a subject matter of inquiry in proceedings for
adoption of tariff under Section 63. It is an undisputed fact that the
procurement quantum has been previously approved by the Hon’ble
Commission in an independent regulatory proceeding. After approval of
the quantum of procurement and the process, the RFP document was
made available to the public for purposes of bid. Generating companies,
including DB Power Ltd. acting on such representation participated in the
bid. Thereafter successful bidders were issued LOI and PPAs were also
subsequently executed. A binding contractual agreement has come into
existence. The only issue that the Hon’ble Commission has to decide is
whether the process of procurement was fair and transparent and that
the tariff is aligned to present market conditions. Hence, the question that
arises, which the Applicant has failed to answer, is whether in a
proceeding under Section 63 of the Electricity Act, 2003, can the
Commission revisit the issue of quantum of procurement. It is necessary to
keep in view the sequence leading to the present proceeding for
adoption of tariff. Only after the procurement quantum was finalized and
approved by the Commission, the Section 63 process was set into motion.
Now at the fag end of the process when contracts are in place, where is
the jurisdiction to revisit the procurement quantum. Surely, Section 63
which deals with adoption of “tariff” does not envisage review of the

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quantum of procurement after the bid process has resulted in discovery of
tariff and execution of PPA.
(xviii)Commission does not have jurisdiction to allow an application of this
nature. A review of Section 63 will demonstrate that the Appropriate
Commission’s jurisdiction is to adopt tariff if such tariff has been
the guidelines issued by the Central Government. Section 63 compulsorily
mandates that the Hon’ble Commission shall adopt tariff, if such tariff has
been determined through transparent process of bidding in accordance
with the guidelines. In the aforesaid jurisdictional matrix, there is no scope
for entertaining an application for reduction of procurement quantum.
The procurement quantum is not a subject matter of inquiry in
proceedings for adoption of tariff under Section 63. It is an undisputed
fact that the procurement quantum has been previously approved by the
Hon’ble Commission in an independent regulatory proceeding. After
approval of the quantum of procurement and the process, the RFP
document was made available to the public for purposes of bid.
Generating companies, including DB Power Ltd. acting on such
representation participated in the bid. Thereafter successful bidders were
issued LOI and PPAs were also subsequently executed. A binding
contractual agreement has come into existence. The only issue that the
Hon’ble Commission has to decide is whether the process of procurement
was fair and transparent and that the tariff is aligned to present market
conditions. Only after the procurement quantum was finalized and
approved by the Commission, the Section 63 process was set into motion.
Now at the fag end of the process when contracts are in place, where is
the jurisdiction to revisit the procurement quantum. Surely, Section 63
which deals with adoption of “tariff” does not envisage review of the
quantum of procurement after the bid process has resulted in discovery of
tariff and execution of PPA.

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(xix) It was submitted by the RVPNL that while exercising power under Section
63, the Commission will continue to be vested with the powers under
Section 86(1)(b), which provision vests the Hon’ble Commission with the
jurisdiction to regulate electricity purchase and procurement process of a
distribution licensee. The aforesaid suggestion is wrong as Section 86(1)(b)
is a general provision while Section 63 is specific. The case law on the
subject is very clear that the special or a specific provision will always
override a general provision. The reliance is made on the judgment titled
as State of Gujarat v. Patel Ramjibhai Danabhai and Others, reported in
(1979) 3 SCC 347, Godde Venkateswara Rao v. Government of Andhra
Pradesh and Others, reported in (1966) 2 SCR 172 and Gujarat Urja Vikas
Nigam Limited v. Essar Power Ltd., reported in (2008) 4 SCC 755.
(xx) It is also submitted that even if the principles of harmonious construction is
applied then the special provision has to be read to cover special
circumstances which are contemplated within that special provision and
the general provision has to operate in circumstances not contemplated
under the special provision. The special provision under Section 63 talks of
a regulatory regime for procurement of power through transparent
process of bidding in accordance with the guidelines issued by the
Central Government. The guideline issued by the Central Government, is
the regulatory framework for procurement of power under Section 63. If
the guidelines govern such special procurement process contemplated
under Section 63, there is no scope for meddling with the process with
exercise of regulatory powers under Section 86(1)(b). This would render
the Section 63 otiose or a nullity.
(xxi) An important aspect of the special provision is that before the special
provision under Section 63 is set into motion the Hon’ble Commission
exercises power under Section 86(1)(b). Before the RFQ and RFP
documents are issued it goes through a regulatory process. A distribution
licensee approaches the Hon’ble Commission for approval for

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procurement of power under Section 86, which includes the quantum of
power, the terms of the RFP and the terms of the RFP documents. The
Commission conducts a public hearing and issues an order confirming the
quantum of procurement, the terms of the RFP and the RPP documents.
Therefore, the regulatory power under Section 86(1)(b) stands substantially
exhausted before the regulatory process under Section 63 kicks-in. In the
present case, a detailed order was issued by the Hon’ble Commission on
23.03.2011 in Petition No. 205 of 2009, filed by RVPNL. Having exercised
regulatory powers under Section 86(1)(b) in relation to the procurement
quantum, there is no scope for further exercise of regulatory powers under
Section 86(1)(b), once the Section 63 process is set into motion. Section 63
process for approval of tariff can start only after the Applicant (with prior
approval of the Commission) has frozen the procurement quantum.
(xxii) The judgment of the Division Bench of the High Court of Rajasthan dated
18.04.2014 in DB Special Appeal (Writ) No. 604 of 2014 has made certain
observations while dismissing the civil appeal filed by SKS Power
Generation (Chhattisgarh) Ltd. and Others. A careful review and analysis
of the judgment would make it clear that at no stage the judgment has
sought to expand the jurisdiction of the Hon’ble Commission so as to
enable the Hon’ble Commission to entertain the present application by
RVPNL for modification of quantum. The Hon’ble High Court has held as
follows:
“Page 32:
... ... A plain reading of these two clauses of Section 86, in our
comprehension, admits of no doubt that the Commission is obligated,
under the statute, to undertake a detailed exercise, while acting under
Section 63 of the Act, to examine as to whether the tariff had been
determined through a fair, objective and hyaline process conducted and
administered in accordance with the guidelines issued by the Central
Government. ... ...”
(xxiii)From the aforesaid, it stands amply clear that section 63 power in case of
adoption of tariff is only limited to an examination as to whether the tariff
has been determined through a fair, objective and hyaline process

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conducted and administered in accordance with the guidelines issued by
the Central Government. The Hon’ble High Court is conscious of the
limited jurisdiction of the Commission and has confirmed the same within
the four corners of the statute.
(xxiv) Surely Section 86(1)(b) powers cannot be used by the procurer at the
adoption of tariff stage to reverse modifying the terms of bid itself, which
bid process was in accordance with the guidelines. Certainly, the goal-
post cannot be changed after the bid process has come to an end by
execution of PPA and only the act of adoption of tariff is left to be done.
In this context, the reference is placed on the judgment of the Appellate
Tribunal of Electricity in Essar Power Limited v. Uttar Pradesh Electricity
Regulatory Commission and Another, Appeal No. 82 of 2011, Lanco
Kondapalli Power Pvt. Ltd. and Another v. Haryana Electricity Regulatory
Commission Appeal No. 156 of 2009, dated 20.01.2010, (1991) SCC 492 in
the matter of Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and
Others, Adani Power Limited v. Gujarat Electricity Regulatory Commission,
being Review Petition No. 6 of 2011 in Appeal No. 184 of 2010, dated
13.02.2012, and Adani Power Limited v. Gujarat Electricity Regulatory
Commission and Another, being Appeal No. 184 of 2010, dated
07.09.2011.
(xxv) Apart from the aforesaid, there is an additional issue relating to the ability
of the EAC to sit on judgment of the Hon’ble Commission’s order dated
23.03.2011. It is submitted that the Commission has approved the quantum
based on its assessment of the demand. Having passed a regulatory order
presumably under Section 86(1)(b), where is the jurisdiction of the Hon’ble
Commission to revisit the order after the order has worked itself out.
Clearly, this is impermissible. Even if regulatory power for examination of
procurement quantum is available, then the said power stands exhausted
as on 23.03.2011.

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(xxvi) The RFP document also has to be seen from the perspective of the ability
of the procurer at the bid process stage to reduce procurement
quantum. In this context, it is submitted that for the sake of arguments
even if it is presumed that it is permissible at this stage to reduce the
quantum, then also the RFP only permits a change of quantum to the limit
of ±10%. Therefore, any change in quantum beyond ± 10% tantamounts to
a deviation from the RFP provisions which is not permissible.
(xxvii) The EAC has no jurisdiction to make a suggestion after the order dated
23.03.2011 has been passed by the Hon’ble Commission. It is the case of
DB Power that the order dated 23.03.2011 has been worked out. After an
order has been worked out, it cannot be reviewed or reopened. So there
cannot be a suo motu review of the order also based on the EAC
decision. Further, the EAC’s jurisdiction and role is extremely limited and
precedes any RFP/ bid process. After the bids have been initiated and
LOI/ PPA executed, the EAC has no jurisdiction to reassess the quantum,
so as to recommend reduction of quantum.
(xxviii)The 4th EAC says no quantum is required. The 5th EAC says 600 MW is
required. The Government of Rajasthan says 500 MW is required. All this is
conflicting with the decision of the procurer who has invited bids for 1000
MW, based on the Hon’ble Commission’s long term assessment in its order
dated 23.03.2011. It is the case of the Petitioner that public interest has to
be seen from multiple perspectives, while the long term interest of the
consumers is important and has to be considered. It is also necessary to
consider the impact of market principles on the power generation sector.
Therefore, when dealing with the issue of public interest, a long term
prospect is required. It is submitted that no material has been placed by
the Applicant (independent of the EAC minutes and GOR letter) to justify
reduction of quantum. Also, the EAC does not provide any material in
support of its decision. The minutes are clearly arbitrary and without basis.

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In light of what is stated above, this Respondent prays that the application
of RRVPNL for reduction of tariff be dismissed.
21. Sh. Akhil Sibbal, Advocate for Lanco Power Ltd. who also supported the
main petition in his oral and written submissions contended that:
(i) The Application filed by RRVPNL for reduction in quantum of power to be
procured purportedly invoking Regulation 7 of the RERC (Power Purchase
& Procurement Process of Distribution Licensee) Regulations, 2004, is
legally untenable and amounts to abuse of process of this Commission
and is therefore liable to be dismissed at the threshold.
(ii) RVPN in aforesaid application prayed that in light of the facts and
circumstances mentioned herein above and the provision of Regulation 7
of the RERC (Power Purchase & Procurement Process of Distribution
Licensee) Regulations, 2004, the Hon’ble Commission may please issue
order for adoption of tariff as it may deem fit and proper in the interest of
justice.
(iii) The aforesaid Regulations are prior to any competitive bidding guidelines
being issued by the Central Government in regard to the adoption of tariff
under Section 63 of the Electricity Act, 2003. It is further submitted that the
instant application of RRVPNL cannot lie under Regulation 7 since the said
regulation only applies to power purchase agreements and amendments
thereto “after execution”. In other words, it is only once the contracting
parties have entered into a contract or an amendment thereto that
contract or amendment is to be placed before the Commission for its
scrutiny under Regulation 7. In the application, RRVPNL is in effect seeking
a reduction in the quantum of power to be procured, which would result
in the nullification of some of the PPAs entered into by the Discoms. As
such, RRVPNL has wrongly invoked Regulation 7 of the aforesaid
Regulations.

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(iv) Further, Commission does not have jurisdiction to allow an application of
this nature. Admittedly, the application has been filed in a Petition for
adoption of tariff under Section 63 of the Act pending before this Court. In
terms of Section 63, this Commission is under a mandate to adopt the tariff
if such tariff has been determined through transparent process of bidding
in accordance with the guidelines issued by the Central Government. This
is the plain language of Section 63 of the Act. The scope of examination in
Section 63 proceedings is confined to the above two aspects. It therefore
follows that the present application filed for purportedly seeking reduction
in the quantum of power is beyond the purview of Section 63 and cannot
be subject matter of proceedings under Section 63. The application is thus
liable to be dismissed.
(v) The scope of consideration in the said Petition by this Hon’ble Commission
is whether the bidding process of procurement of power was transparent
and in accordance with the bidding guidelines issued by the Central
Government. It is submitted that the scope of enquiry by this Hon’ble
Commission is limited to the said aspect and there is no further scope of
considering a prayer for reduction of quantum of power already
approved for procurement and for which LOIs have been issued and PPAs
executed, in a proceeding under Section 63 of the Act. By way of this
application, RRVPNL is seeking indirectly to reopen/reverse the order of
the Commission dt. 23.3.2011 issued for approval of procurement of 1000
MW+10% power on Case-1 basis on a Petition made by RRVPNL being
Petition No. 205/2009, which has been acted upon and has attained
finality, which is not permissible and if, allowed will lead to further legal
proceedings for breach of PPA.
(vi) It was argued on behalf of RRVPNL that de-hors and independent of
Section 63, this Commission has powers under Section 86(1)(b) of the Act
to regulate electricity purchase and procurement process of distribution
licencees and the said power can be exercised by this Commission in a

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proceeding under Section 63 of the Act and therefore a prayer for
reduction of quantum of power can be considered and granted by this
Hon’ble Commission. RRVPNL had relied on the judgment of the Division
Bench of the Hon’ble High Court of Rajasthan dated 18.04.2014 in DB
Special Appeal (Writ) No. 604 of 2014 to contend that Section 63 and
Section 86(1)(b) have been read together by the Hon’ble High Court and
therefore even in a proceeding under Section 63, Section 86(1) (b) can be
pressed into service.
(vii)In this regard it is submitted that the said argument is wholly misconceived
in as much as Section 86(1)(b) is a general provision whereas Section 63 is
a specific provision and the specific provision will override the general
provision. Further, in the said matter, the issue before the Hon’ble High
Court did not pertain to reduction of quantum of power after execution of
PPAs. The issue was whether this Hon’ble Commission has jurisdiction under
Section 63 to adjudicate on alleged violation of Bidding Guidelines and
terms of RFP documents and the allegations of non-transparency in the
bidding process. Therefore, the judgment has to be read and understood
in that context.
(viii) Reliance is placed on the judgment of the Appellate Tribunal of Electricity
in Essar Power Limited v. Uttar Pradesh Electricity Regulatory Commission
and Another, Appeal No. 82 of 2011.
(ix) Clause 3.5.7 of the RFP gives a right to RVPNL to increase/decrease the
requisitioned capacity by up to ten percent (10%) of the quantum
indicated in Clause 1.3.1 only with the approval of the appropriate
Commission. Thus, even as per the RFP, an increase or decrease in the
quantum of power to be procured can be made during the stage of
evaluation and selection of the successful bidders. This process of
selection of successful bidders is completed and LoIs have been issued to
them, requisite PPAs have also been executed and a Petition has been

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filed for adoption of tariff. Therefore, even under the RFP the proposed
reduction in the quantum is impermissible at this stage.
(x) Pleadings as well as prayer made in the application are completely
vague and the materials placed in the form of decisions taken by Energy
Assessment Committee (EAC) in the 4th and 5th meetings also appear to
be completely arbitrary. In the meeting held on 23.11.2010, EAC
approved procurement of 1000 MW for the next 25 years based on the
long term power requirement of the State. In the minutes of the 4th
meeting held on 29.01.2014, it is recorded by EAC that there is no
requirement of any quantum of power. Quite to the contrary, in the 5th
meeting of EAC held on 21.05.2014, it is recorded that quantum of power
required is 600 MW. As against this, the Energy Department, Government
of Rajasthan vide its letter dated 25.07.2014 conveys its approval for
purchase of 500 MW power, without disclosing any reasons for the
reduction of 100 MW. Notably, as per the procurer, i.e., RRVPNL, 1000 MW
power is required. Thus, the decision of the EAC, in as much as it lacks any
reasons or justification, is wholly contrary to the order dated 23.03.2011
passed by this Hon’ble Commission.
(xi) It may be noted that the decision taken in the 5th meeting dated
21.05.2014 overrules the decision taken in the 4th meeting dated
29.01.2014. In the 4th meeting, the EAC had decided not to procure any
power on long terms basis under Case-1 for the purported reason that 800
MW units were available (no details are given) and the loss in capacity of
the projects mentioned in the minutes would be slightly compensated by
upsizing 660 MW units under planning at Kalisindh and Banswara. In the
5th meeting, it is noted that Kalisindh TPS would have to be restricted to
2X660 MW. Additionally, it is stated that there is a continuous shortfall in
generation from Giral Lignite TPS Unit 1 & 2 and these units are operating
at 25-30% PLF. However, the minutes of meeting do not reflect any basis

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for arriving at a conclusion that 600 MW and not 1000 MW would be
required.
(xii) It is important to note that the 18th EPS published by CEA states that
power demand of Rajasthan increases every year by about 1000 MW on
an average for the next 25 years. The likely power demand in 2016-17 is
projected to be 13886 MW, in 2021-22, 19692 MW which will further
increase to 40284 MW in 2031-32. As per projections of RVPN, projected
Demand in 2016-17 is 12558 MW & in 2021-22 it is 19997 MW. From the
above, it can be seen that demand trend is increasing as compared to
18th EPS demand in 2021-22. Further the State’s own generation of about
1000 MW has been dropped which will create further demand gap
capacity requirements. Thus, procurement of 1000 MW for the next 25
years is clearly justified keeping in view the ever increasing demand. Thus,
there is an apparent conflict in so far as views of EAC, Government and
procurer itself is concerned. The application thus lacks credibility and is not
made bonafide and is liable to be dismissed on this ground as well.
(xiii) RRVPN has filed this petition for adoption of tariff quoted by M/s PTC India
Ltd. (through developer M/s Maruti Clean Coal and Power Limited), M/s
PTC India Ltd. (through developer M/s DB Power Limited) and M/s Lanco
Power Ltd. (Generation source- M/s Lanco Babandh Power Limited) (with
reduction of 5 paisa per kWh) in terms of Section 63 of the Electricity Act
2003 whereas SKS Power Generation (Chhattisgarh) Ltd. and Athena
Chhattisgarh Power Ltd. (SKS and Athena), who had participated in the
bidding process filed objections to the Petition for adoption of tariff before
this Commission to argue that the bidding process was not conducted in
accordance with the guidelines and the terms of the RFP and further that
the bidding process was not transparent.
(xiv) Both SKS and Athena have raised an objection that the additional
quantum for supply permitted to L1 to L3 beyond what was originally
offered by them is an impermissible deviation from the terms of the RFP

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and further that the discount of 5 paisa in the tariff of Lanco Power Ltd.
after the financial bid was opened is also prohibited. It is submitted that
neither of the two actions amount to a departure or violation of the RFP
conditions especially Clause 3.5. In this regard, Clause 3.5 of the RFP is
reproduced hereunder:-
“3.5 STEP IV – Successful Bidder(s) Selection
3.5.2 - The Levelized Tariff calculated as per Clause 3.4.8 for all Financial Bids
of Qualified Bidders shall be ranked from the lowest to the highest.
3.5.3 - The Bidder with the lowest Levelised Tariff shall be declared as the
Successful Bidder for the quantum of power (in MW) offered by such Bidder
in its Financial Bid.
3.5.4 - The selection process of the Successful Bidder as mentioned above
in Clause 3.5.3 shall be repeated for all the remaining Financial Bids of
Qualified Bidders until the entire Requisitioned Capacity is met or until the
time when the balance of the Requisitioned Capacity is less than the
Minimum Bid Capacity.
3.5.6 The selection process shall stand completed once the Requisitioned
Capacity has been achieved through the summation of the quantum
offered by the Successful Bidders or when the balance of the Requisitioned
Capacity is less than the Minimum Bid Capacity.
3.5.9 - There shall be no negotiation on the Quoted Tariff between the
Authorized Representative and the Bidder(s) during the process of
evaluation.
3.5.12 - The Authorized Representative, in its own discretion, has the right to
reject all Bids if the Quoted Tariff are not aligned to the prevailing market
prices.”
(xv) In terms of clause 3.5.9 of the RFP there is an interdict on ‘negotiation’ on
the ‘Quoted Tariff’ between the authorised representative/ procurer and
the bidder during the process of evaluation. This prohibition is restricted to
‘negotiation’ and ‘quoted tariff’. Quoted tariff is defined in the RFP to
mean the sum total of quoted capacity charges and quoted energy
charges which in turn are further defined. It is further the contention of
Athena that the quoted tariff as referred to in Clause 3.5.9 includes
quantum of power. This contention is misconceived because firstly,
Clauses 3.5.3 and 3.5.6 which are sub clauses of the same clause 3.5,

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specifically use the term “quantum” whereas 3.5.9 uses the term ‘quoted
tariff’. By the use of different terms, it follows that the one does not refer to
the other. Secondly, it is clear from the definition of ‘quoted tariff’ that it
refers to the price / charges and not to ‘quantum’ inasmuch as it is the
sum total of the capacity and energy charges. Therefore, inasmuch as
the definition of ‘quoted tariff’ refers to the charges as quoted in format
4.10, it is referring to the figures and not to the ‘quantum’. The contention
of Athena and SKS seeks to expand the express prohibition, which is
limited, to include by implication a prohibition as regards “quantum”,
which is impermissible and defeats the intent behind expressly limiting the
prohibition in the RFP.
(xvi) As regards the interpretation of clauses 3.5.3 to 3.5.6, it is SKS and Athena’s
case that the procurer can only accept the quantum of power for supply
offered by the bidder in its financial bid and nothing more. It is submitted
that the correct interpretation of the said clauses is to the effect that the
procurer is bound to, at the least, as a minimum, accept what is offered
by the lowest bidder in its financial bid but is not precluded from
accepting a greater quantum upto the requisitioned capacity. This
follows not only from the fact that Clause 3.5.9 restricts the prohibition to
“Quoted Tariff” but also from the fact that the language of Clause 3.5.3
only obligates the procurer to declare the lowest bidder as the successful
bidder for at least the quantity offered in its financial bid. Clause 3.5.3 thus
states that the lowest bidder ‘shall be declared as the successful bidder
for the quantum of power (in MW) offered by such bidder in its financial
bid’ and does not state that the said bidder shall be declared successful
‘only for such quantum of power’.
(xvii) It is an undisputed fact that the tariff quoted by SKS and Athena, if
considered, would result in additional expenditure of Rs. 4007 Crores,
which would then have to be charged and recovered from the

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consumers, i.e., the general public and would therefore be against the
policy of the State.
(xviii)In the instant case, the process for allocating additional quantum was
entirely transparent inasmuch as first the L-1 bidder was given the
opportunity to offer additional quantum, thereafter the L-2 bidder, and
lastly the L-3 bidder, by which point the requisitioned capacity was
exhausted. With all three bidders, as required by the terms of the RFP, the
quantum as offered in their bid was accepted, and each one, in turn, was
permitted to offer additional quantum which is not prohibited under the
terms of the RFP and subserves the public interest of procuring power at
lower cost, and is therefore permissible.
(xix) As regards the prohibition on negotiation on the quoted tariff, it is
submitted that what clause 3.5.9 prohibits is ‘negotiation’. Negotiation
necessarily involves a give and take, a bargaining of some sort. What is
sought to be prohibited is to prevent the procurer from pressurizing the
lowest bidder into reducing its price by making acceptance of its offer a
condition of such reduction. In the instant case, Lanco is not complaining
about the 5 paisa reduction in its quoted tariff and it does not lie in the
mouth of an unsuccessful bidder to raise such a grievance. Moreover, by
such reduction, the ranking of lowest to highest bidder has not been
disturbed in any manner on the basis of what was quoted in the financial
bid. It is not therefore, a case where Lanco was given an opportunity to
lower its bid, such that it would gain any preference or precedence in the
queue that had been formed, when the financial bids were opened. As
such there is no impermissible deviation.
(xx) It is also significant to note that the competitive element in the structure is
the tariff and not the quantum. The bidders are free to quote for supply of
as much capacity as they wish upto the requisitioned capacity. Even if
the 5 paisa reduction were struck down, Athena or SKS are not thereby

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put to any advantage since there is no change in the ranking of lowest to
highest bidder and the only casualty is public interest.
(xxi) If this Commission finds, that the 5 paisa reduction ought not to be
permitted, then to that extent the original tariff as offered by Lanco,
without the 5 paisa reduction, may be approved. It is submitted that the
consequence of disapproval of the 5 paisa reduction would not be that
the entire bidding process and its outcome must perish. The 5 paisa
reduction does not in any manner affect the ranking of the bidders, and
its dispproval would equally therefore, have no impact on the ranking. As
such, the tariff, only to the extent of the 5 paisa reduction, would be
disapproved, and the remaining tariff be approved.
(xxii) SKS and Athena in their objections have alleged that the bidding process
is not transparent, Respondents have committed a fraud and have sought
to give preference to the L1 to L3 bidders and have indulged in ante-
dating of documents to achieve a malafide objective. In this regard, SKS
and Athena have placed reliance on the fact that letters were issued to
the unsuccessful bidders asking them to keep alive the bid bonds(security)
even though letters of intent had already been issued to the so called
successful bidders prior thereto. The objectors infer once that in fact the
LOIs issued had been back dated and were never issued on the dates on
which they were purportedly issued because had that been the case,
there would have been no occasion for the Respondents to seek
extension of the bid bonds by the unsuccessful bidders once the decision
to grant LOIs had already been taken and LOIs issued. In this regard, it is
relevant to submit that the RVPNL had filed an additional affidavit before
the Ld. Single Judge in the Writ Petitions filed by the unsuccessful bidders
explaining the circumstances in which the said communications were
issued and providing proof of dispatch of the LOIs which conclusively
establishes that the speculative and wild allegations of malafide and
antedating by the objectors are wholly without substance.

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(xxiii)Athena has no locus to object to the bidding process inasmuch as it was
not a bidder in the bidding process that is sought to be impugned, it is
submitted that Athena is a generating company who had tied up with a
trading licensee and it is the trading licensee which placed a bid on its
own behalf without any relationship of agency, relying on the generation
source of Athena. The said bidder, namely, PTC India Ltd. has not
challenged the bidding process and therefore has not sought any award
in its favour in respect of supply from the Athena’s generating station.
(xxiv) It is further submitted that in respect of the generating station of Athena, it
is PTC and not Athena who is bidder, it is PTC and not Athena who would
enter into the PPA, and it is PTC and not Athena who would be required to
give the performance guarantee. In other words, upon any award of
contract in respect of the generating station of Athena, it is PTC and not
Athena who would have the privity of contract with the procurers and
would be bound to make the supply. No rights under such PPA would be
created in favour of Athena and no obligation imposed thereupon. In the
absence of PTC having challenged the bid process, Athena cannot be
permitted to do so. Athena thus has no locus to challenge the bid process
before this Hon’ble Commission.
22. Per contra Sh. Angad Mirdha, Advocate for Athena Chhatisgarh Power
Ltd.(APCL) in submissions contended that:
(i) RRVPNL had issued RFP for procurement of 1000 MW of power(+/- 10%)
wherein a bidder could bid for supply of minimum 100 MW of power. In
terms of Clause 3.5.3 of the RFP, the lowest tariff bid would be declared
successful for the quantum of power offered by such bidder. In terms of
Clause 3.5.4 the selection process of the successful bidder as mentioned
in Clause 3.5.3 shall be repeated for all the remaining Financial Bids of
Qualified Bidders until entire requisitioned capacity is met.

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(ii) ACPL had bid for supply of 200 MW of power and was declared to be the
fourth lowest bidder (L4). The first 5 lowest bidders cumulatively bid for
supply of 906 MW of power. Therefore ACPL should have been declared a
successful bidder and awarded the LOI for supply of 200 MW of power at
the bid tariff.
(iii) The present petition was filed by RRVPNL under Section 63 of the Electricity
Act, 2003 for adoption of tariff provided the process of procurement was
fair and transparent. On the contrary RRVPNL had issued LOIs in a non
transparent and unfair manner and in complete violation of mandate of
Section 63 of the Act as per the following reasons:
(a) Despite the fact that M/s. PTC India Ltd. for DB Power having made an
original bid of 311 MW, LOI dated 27/9/2013 was issued for additional 99
MW at the quoted tariff as per the financial bid.
(b) Similarly, LOI dated 27/9/2013 was issued to M/S Lanco Power Ltd. for
total 350 MW (original bid quantity of 100 MW + additional 250 MW).
There is also a reduction in tariff of 5 Paisa from the original bid
document.
(c) Maruti Clean Coal & Power Ltd. has also been awarded an additional
quantum of 55 MW on 27.09.2013 over and above the quoted quantum
of 195 MW.
(d) Para 5.5 of guidelines expressly stipulates that no deviation is permissible
from the bidding document without the approval of the appropriate
Commission. Further all revised documents have to be provided two
months prior to all bidders so as to enable them to submit bids. Para 5.6
(ii) & (iii) also rule out any amendment beyond the Request for Proposal
(RFP) stage. Clause 5.16 expressly mandates that any deviation from
these guidelines shall not be made without prior approval of the
Commission.
(e) The RFP at the outset makes it clear that the bidding has to be in
accordance with the aforementioned guidelines. It is also expressly

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mentioned in the RFP that it intends to procure 1000 MW power. Clause
2.3 of the RFP expressly states that any amendment to the RFP must be
notified to all entities to whom RFP is issued, besides all clarifications also
have to be sent to all bidders. Clause 3.5 is vital as under Clause 3.5.3
the bidder with the lowest levelized tariff shall be declared as the
successful bidder for the quantum of power offered by the bidder on its
financial bid. Clause 3.5.4 expressly mandates that procedure in Clause
3.5.3 shall be repeated for all remaining financial bids of qualified
bidders until entire requisitioned capacity is met. The same is also the
effect of a cumulative reading of Clause 3.5.5, 3.5.6, 3.5.7.
(f) The only discretion vested in Clause 3.5.7 which gives a right to increase
the requisition capacity upto 10% but there is no discretion vested in the
tendering authority to deviate from the aforementioned clauses.
(g) As per Clause 3.5.9, negotiation w.r.t. the quoted tariff is completely
prohibited. It is apparent that the action of the RRVPNL in having
altered the quantity of bid by DB Power vide LOI dated 27/9/2013 and
having altered the quantity and price qua M/s. Lanco Power Ltd. and
that of Maruti Clean Coal Ltd. is clearly in violation of the
aforementioned express and mandatory clauses. The Hon’ble Supreme
Court in the case of West Bengal State Electricity Board vs. Patel Engg.
Co. Ltd. (2001) 2 SCC 451 has upheld this proposition. The Hon’ble
Supreme Court in the case of Monarch Infrastructure (P) Ltd. v.
Commissioner, Ulhasnagar Municipal Corporation and Ors., AIR 2000 SC
2272 has held that the rules of the game cannot be changed after the
game had begun.
(h) There is also an additional overarching case of ante-dating of LOI
issued on 24.9.2013 and 27.9.2013. RVPN vide its letter dt. 30.09.2013 has
requested for extension of validity of bid till 31.12.2013 with suitable
extension in validity of the Bid Bond in respect of all developers. Thus, if
the selection of the successful bidder and decision of the issue of LOI

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and acceptance was yet to be taken as on 30.9.2013 then there could
be no question of issuance of LOI on 24.9.2013 and 27.9.2013. The
reason for such ante-dating is not far to seek on declaration of the
elections the code of conduct under the Representation of People Act,
1951, came into force w.e.f 4/10/2013. Thus, the Respondent acted with
hot haste and proceeded to ante-date LOI’s. The impugned action is
thus malafide and deserves to be set aside.
(i) It is well settled that when the Government is dealing with the public, by
way of entering into contracts or granting other forms of largesse, it
cannot act arbitrarily at its sweet will and, like a private
individual, deal with any person as it pleases. Its action
must be in conformity with standard or norms which are
not arbitrary, irrational or irrelevant. In dealing with
tenders, the Government has to necessarily conform to the terms and
conditions of tender documents and conditions. There is very little
discretion in such cases and even, where there is discretion, the power
or discretion of the Government in the matter of grant of largesse must
be confined and structured by rational, relevant and non-discriminatory
standard or norm. RRVPNL in this case has acted in complete
contravention of the' Guidelines for Determination of Tariff by Bidding
Process for Procurement of Power by Distribution Licensees, 2005'
(hereinafter "Bidding Guidelines") as amended from time to time.
(j) In the present case, pursuant to the conclusion of the competitive
bidding process and in violation of all principles relating to bidding,
RRVPNL entered into negotiations with L 1, L2 and L3 to increase their
offered/bid quantum of power without informing any of the other
qualified bidders and thus prejudicing all other qualified bidders
including L4, i.e., ACPL.
(k) The action of RRVPNL in negotiating the bid conditions with L 1, L2 and
L3 without involving any of the other qualified bidders and in complete

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contravention of the provisions of the RFP and the Bidding Guidelines is
grossly illegal and are liable to be quashed. Clause 5.5 of the Bidding
Guidelines provides that RRVPNL may amend the RFP subject to giving
notice of 2 months after the amendment for submission of bids.
Therefore, in terms of the Guidelines, RFP can be modified only prior to
the submission of the bid. This principle is further incorporated in Clause
2.3.1 and 2.3.2 of the RFP. RRVPNL has indirectly modified the terms of
the RFP by arbitrarily increasing the bid quantum of power over and
above the quantum originally offered by L 1, L2 and L3, when ACPL was
declared L4 being one of the successful bidders. Therefore, RRVPNL has
in effect taken away the right of L4 to be a successful bidder and
handed it over to L 1, L2 and L3 by a process which is vitiated by
arbitrariness and unfairness, a modus which demonstrates in
unequivocal terms that RRVPNL has acted with malafide intention and
contrary to the settled principles of law.
(l) RRVPNL is expressly prohibited from engaging in private negotiations
with any bidder to the prejudice of other qualified bidders. The Bidding
Guidelines specifically provide that any deviation from RFP or the
Bidding Guidelines must have prior approval from the
appropriate Commission. Given that RRVPNL on its own whims altered
the bid process without any approval being sought from the
appropriate Commission, the LOls must be struck down with immediate
effect in order to avoid perpetuating the Illegality.
(m)The action of the RRVPNL to clandestinely negotiate with L1, L2 and L3
by arbitrarily increasing the quantum of power bid by them, is in
complete supersession of Clause 5.5 and 5.16 of the Bidding guidelines.
It is settled law that when any statutory guideline provides a particular
manner for doing a particular act, the thing or act must be done in
accordance with the manner prescribed therein. State instrumentalities
are expected to strictly comply with statutory guidelines.

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(n) As per the RFP, any bidder can be successful only to the extent of the
quantum offered by the bidder in its financial bid. Since Clause 3.5.3 of
the RFP clearly provides that "the Bidder with the lowest Levelized Tariff
shall be declared as the Successful Bidder for the
quantum of power (in MW) offered by such Bidder in its Financial Bid."
the selected bidder is a successful bidder only for the quantum of
power offered. Beyond the quantum of power offered, the selected
bidder cannot be considered as successful. This is the plain and
unambiguous interpretation of Clause 3.5.3 and it should be given
effect to. The issuance of LOls for quantum of power more than the
quantum of power offered under the financial bid is illegal and liable to
set be aside and quashed.
(o) ACPL being L4 and SKS Power Limited being L5 were also successful
bidders since the total cumulative capacity bid by L 1, L2, L3, L4 and L5
was 906 MW (within Requisitioned Capacity) but ACPL being L4 and SKS
Power being L5 were not awarded the LOls in contravention of the RFP
since RRVPNL chose to arbitrarily increase the quantum of power bid by
L 1, L2 and L3 and issued LOls to and signed PPAs with L 1, L2 and L3.
(p) It is submitted that the bidding parameters prescribed have to be
followed to the letter to ensure transparency. The Hon'ble Supreme
Court in the case of West Bengal State Electricity Board vs. Patel Engg.
Co. Ltd. (2001) 2 SCC 451 and in Air India Ltd. vs Cochin International
Airport Ltd. (2000) 2 SCC 617 has upheld this proposition.
(q) RRVPNL could not have negotiated the quantum of power with L1, L2
and L3 after the process of bidding was over and in contravention of
the guidelines and the RFP especially when the bidding process
provided that the selection process of the successful bidder as
mentioned in Clause 3.5.3 shall be repeated for all the remaining
financial bids of qualified bidders until the entire requisitioned capacity
is met or until the time when the balance of the requisitioned capacity

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is less than the minimum bid capacity. Reference in this regard may be
made to the order of Appellate Tribunal for Electricity in Appeal No.
109/2009, dated 4th September, 2009 in the matter titled Lanco
Infratech Ltd. v Punjab State Electricity Regulatory Commission and Ors
and judgment of the Supreme Court in M/s G.J. Fernandez Vs State of
Karnataka and Ors (1990) 2 SCC 488.
(r) RRVPNL is seeking to evolve its own procurement process which is
contrary to Section 63 (Bidding route) and the statutory framework of
the Act, 2003. Since RRVPNL chose to procure power through a
competitive bidding process there can be no negotiations now on the
quoted quantum of power and the quoted tariff in terms of Clauses
3.5.3, 3.5.4, 3.5.6 and 3.5.9 after bids have been opened and once the
evaluation process had commenced. It is submitted that when tenders
are invited, the terms and conditions must indicate with legal certainty,
norms and benchmarks. This "legal certainty" is an important aspect of
the rule of law. If there is vagueness or subjectivity in the said norms it
may result in unequal and discriminatory treatment. It will violate the
doctrine of 'level playing field' as it does in the present case. Reference
may be made to the judgment of Supreme Court in Reliance Energy
Limited and Anr. v Maharashtra State Road Development Corporation
Ltd. and Ors. (2007)8SCC and judgment of APTEL in the case of Essar
Power Ltd. Vs UPERC & Anr 2012 ELR (APTEL) 182.
(s) RRVPNL has failed to appreciate that it is well settled law that every
activity of a public authority must be informed by reason and guided
by public interest and must not be violative of Article 14 of the
Constitution of India. Reference may be made to the judgment of
Supreme court in Akhil Bhartiya Upbhokta Congress v. State of Madhya
Pradesh [(2011) 5 SCC 29J.
(t) In terms of the RFP and by way of the extension letters, ACPL remains
tied up with the subject tender as the 200MW of power offered by it

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continues to be there even as of today being a successful bidder and
for that reason RRVPNL has sought continuous extension of the bid
bonds. Therefore, in the terms of the bid documents and being a
successful bidder even as of date, ACPL has a legitimate expectation
of being granted the bid for the quoted quantum.
(u) Principles of promissory estoppel as laid down by the Supreme Court of
India were directly applicable to the facts of the present case. It is
respectfully submitted that L1, L2 and L3 by means of the RFP had held
out a promise on the opening of a financial bid on 4th April, 2013 and
accordingly was estopped from going back on their promise by issuing
the alleged LOls in favour of L 1, L2 and L3 to the exclusion of ACPL.
23. Sh. Atul Shanker Mathur, Advocate for SKS Power Generation (Chhatisgarh)
Ltd., in his submissions mainly contended as under:
(a) It is respectfully submitted that as per the Section 63 of the Act, this
Hon'ble Commission has the power to adopt the tariff if such tariff has
been determined through transparent process of bidding in
accordance with the guidelines issued by the Central Government. The
power given to this Commission under this Section is merely to adopt or
reject the tariff and has no power to modify the tariff in any manner
whatsoever. It is further submitted that the challenge to the tender
process by the SKS Power Generation relates only to the grant of
additional quantum of power to the Respondent Nos. 7 to 9 for which
order cannot be passed by this Hon'ble Commission in exercise of
power under Section 63 of the Act. In this view of the matter, the
present Petition is liable to be rejected on this ground alone.
(b) The Commission has no jurisdiction to entertain the present petition as
there are various disputes raised by the parties which relate to the
tender process itself and do not relate to the tariff as offered by such
bidders to the tender in any manner. If the manner of determination of

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tariff is illegal and arbitrary and the same does not encompass 'tariff' as
such, it would not be within the scope of powers as provided in Section
63 of the Act of this Hon'ble Commission to adjudicate upon.
(c) The limited jurisdiction of Electricity Regulatory Commissions under
Section 63 of the Electricity Act has been spelt out by the Appellate
Tribunal for Electricity in Madhya Pradesh Power Trading Company Ltd.
vs. Madhya Pradesh Electricity Regulatory Commission & Ors. [2010 ELR
(APTEL) 634]. Section 63 of the Electricity Act, 2003 came up for
interpretation in the Judgment of the Appellate Tribunal in Essar Power
Limited versus U.P.E.R.C. & Others in 2012 ELR (APTEL) 182. This
Commission in Petition No. RERC- 222/10 in the matter of M/s RKM
Powergen Private Limited, Chennai has categorically held that
unsuccessful bidders cannot have the indulgence of the Commission in
relation to award of bid/contract.
(d) Present petition filed by the RRVPNL is liable to be dismissed as in the
present case none of the essential conditions as provided in Clause 5.5
of the Standard Bidding Guidelines have been followed by the RRVPNL.
It is in violation of Clause 5.5 of the Standard Bidding Guidelines issued
by the Ministry of Power.
(e) Present petition is liable to be dismissed on the ground that the
RRVPNL has not sought approval of deviations made by the
RRVPNL in the manner of selection of bidder even in the present
Petition filed. It is respectfully submitted that the RRVPNL without
seeking any approval from this Hon'ble Commission cannot deviate
from the terms of the RFP (which admittedly Applicant has done). Such
an act of the present RRVPNL completely vitiates the entire tender
process and does not let the same remain fair and transparent in any
manner whatsoever.
(f) The SKS Power Generation bid for supply of 100 MW of power and was
declared to be the fifth lowest bidder (L5). The first 5 lowest bidders

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cumulatively bid for supply of 906 MW of power. Therefore the SKS
Power Generation should have been declared a successful bidder and
awarded the Lol for supply of 100 MW of power at the bid tariff.
Instead, the RRVPNL clandestinely indulged in private negotiations with
the Respondent Nos. 7, 8 and 9 and arbitrarily increased the bid
quantum of power.
(g) RRVPNL in its petition has mentioned that the Board of Directors had
decided the matter to be referred to the BEC and the Consultant to
suggest whether negotiation should be done and if yes in what
manner. The said fact is clearly in violation of not only the Standard
Bidding Guidelines but also the RFP and particularly Clauses 3.5
onwards which mention about the manner of selection of the
successful bidder. The said fact clearly shows that the tender process
adopted by the RRVPNL was not transparent in any manner
whatsoever.
(h) Apart from the Respondent Nos. 7 to 9, no other bidder was aware that
the RRVPNL has called for the increase of the quantum of power
offered by such bidder which was in violation of Clause 3.5 of RFP.
Negotiations were completely done behind the back of the successful
bidders which would categorically show that the same were not
transparent in terms of Section 63 of the Act.
(i) RRVPNL on one hand in their letter dated 30 September, 2012 sent to
the SKS Power Generation as well as Respondent No. 6 stated that the
"Bid process" has not yet been concluded and on the other hand in the
alleged LOls sent to Respondent No. 8 and 9, illegally granting
additional quantum of power on 27 September, 2012 stated that the
"Bid process" has been concluded. This act shows the malafide
conduct of the RRVPNL throughout the process of finalization of bids
and in view thereof the complete tender process has been vitiated.

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(j) RRVPNL could not have changed the terms of the bid after the bidding
process had begun, i.e., rules of the game cannot be changed after
the game has begun. It is germane to mention that the RVPNL could
not have modified terms of the RFP that too after the bids were made.
If the RVPN had followed the process prescribed under the RFP, M/s SKS
Power would have been a successful bidder as having quoted the fifth
lowest tariff and the total bid quantum of 5 lowest bidders being under
1000 MW. Further such increase in the quantum of power bid by the
Respondent Nos. 7, 8 and 9 indirectly amounts to amendment of the
RFP which amendment is in complete contravention of Clause 2.3.1
and 2.3.2 of the RFP and Clause 5.5 and 5.16 of the Bidding Guidelines
which state that the provisions of RFP can be amended only prior to
submission of bids and not thereafter. The present petition is liable to be
dismissed on this ground alone.
(k) As per the RFP, bid bond shall mean the unconditional and irrevocable
bank guarantee to be submitted along with the bid by the bidder
under clause 2.12 of RFP as per format 4.9 whereas format of bid bond
as given in 4.9 of the RFP provides the amount of the bid bond to be
not less than that derived on the basis of Rs. 3,00,000/MW multiplied
with the total quantum of power offered by the bidder. This shows that
the bid bond given by the Respondent Nos. 7, 8 and 9 along with their
bids were for the quantity of power offered and in the absence of the
additional bid bond to the extent of the additional quantum of power
granted to the Respondent Nos. 7, 8 and 9, the bids of the said
Respondents cannot be accepted in terms of the RFP. Accordingly, the
grant of additional quantum of power to the said Respondents’ for
which no bid bond was given along with their bids is completely illegal
and in violation of the terms of RFP itself.
(l) However, RRVPNL has reduced the quantum of power procurement by
50% from 1000 MW to 500 MW without taking any approval of

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Commission in gross violation of RFP and Competitive Bidding
Guidelines issued by MOP (refer Clause 3.5.7). In any event, there can
be no amendment to RFP at this stage and any changes if at all
permissible, had to be carried out prior to invitation of the financial
bids.
(m) The guidelines for bidding as issued by the MoP have a statutory basis
and are in the nature of subordinate legislation on which basis the
model form of RFP and RFQ was drafted by MoP for all licensees
including the Petitioner. The same are binding in nature and the RFP
issued by the RRVPNL is within the purview of the guidelines as issued by
the MoP and no deviation in any manner whatsoever can be made by
the RRVPNL from the same.
24. We have considered the averments made in the petition, the interim
application filed on 24.11.2014, the oral submission made during the course
of hearing by the Petitioner’s Advocates, the statements filed by L-1, L-2 & L-
3 bidders both on the petition and interim application filed by the
Petitioner, the averments made on behalf of the unsuccessful bidders
namely M/s.SKS Power Generation Ltd., and Athena Chattisgarh Power Ltd.,
and the judgments cited by respective parties.
25. The issues which arise for consideration in view of the rival contentions are :
i. Whether the bidding process carried out by the petitioner is in
accordance with Section 63 of Electricity Act, 2003 and bidding
guidelines issued by Govt. of India; and
ii. Whether the bidding process carried out by the Petitioner is
actuated by malafides;
iii. Whether Petitioner can seek approval for purchase of reduced
quantity of power of 500 MW when this Commission had approved
for procurement of 1000 MW for which bidding process was carried
out.

Rerc order ppa cancellation petition no 265

Rerc order ppa cancellation petition no 265

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Rerc order ppa cancellation petition no 265