Tariff During Registration Was To Remain Fixed For 25 Years; CSPDCL Waived Its Rights: Delhi High Court Allows IREDA's Appeal Over GBI Scheme

The Delhi High Court Bench of Chief Justice and Justice Tushar Rao Gedela has observed that under the Generation Based Incentive Scheme (GBI) Scheme, 2010 by Ministry of New and Renewable Energy, the tariff at the time of registration of project would remain constant for a period of 25 years and any upward revision of tariff by State Electricity Regulatory Commissions (“SERC”) from back date shall not be counted. The Court denied relief to Chhattisgarh State Power Distribution Co Ltd. in its dispute with IREDA in relation to the GBI Scheme. Facts To give impetus to rooftop and smaller solar plants, Ministry of New and Renewable Energy (“Ministry”) launched a scheme of Generation Based Incentives (“GBI”) and accordingly issued guidelines dated 16.06.2010 known as Guidelines for Rooftop PV & Small Solar Power Generation Program (“Guidelines”). Under the scheme, the Distribution Utility was to purchase power from a Project Proponent and thereupon, it was to claim GBI from the Program Administrator i.e. Indian Renewable Energy Development Agency Limited (“IREDA”) on fulfilment of certain requirements. Chhattisgarh State Power Distribution Co. Ltd. (“CSPDCL”), entered into a MOU with IREDA and certain Project Proponents wherein it was agreed between parties that applicable tariff was to be determined as per orders passed in a Suo Motu Petition by Chhattisgarh State Electricity Regulatory Commission (“CSERC”). Thereafter, CSPDCL was registered with IREDA to avail GBI under the scheme on 17.09.2010 Clause 1 of the Guidelines provided the following formula for calculation of GBI. GBI = Tariff determined by CERC – Base Rate. The Base rate was agreed at Rs. 5.50/kWh and would remain constant for 25 years. Further Clause 8 of the Guidelines provided that if any difficulty arose in giving effect to the Guidelines or its interpretation, a Committee constituted by the Ministry would take a decision binding on all the parties. Disputes arose between the parties as the tariff fixed at that time by CERC was Rs. 17.91/kWh while the tariff fixed by CSERC at that time Rs. 15.84/kWh. Initially, IREDA processed GBI in favour of CSPDCL using the difference between Rs. 17.91 and 5.67 i.e. 12.24/kWh. However, vide communication dated 22.06.2012, IREDA stated that the applicable GBI rate was Rs. 10.17/kWh i.e. Rs. 15.84 – Rs. 5.67 and the amount of Rs. 16,06,362 was released extra and was liable to be adjusted/ reconciled in the future claims. Litigation History A Committee was constituted under Clause 8 of the Guidelines which held that the tariff applicable at the time of registration i.e. Rs. 15.84/kWh would be used for the payment of GBI. CSPDCL filed a petition before CSERC which was rejected by the State Commission vide its order dated 02.01.2015. Against this, CSPDCL preferred an appeal before the Appellate Tribunal for Electricity which was dismissed by the Tribunal vide its order dated 23.09.2015. Eventually, CSPDCL filed a writ petition before the Delhi High Court, whereby the Single Judge vide his decision dated 21.05.2025 allowed the petition. Against this order, the present appeal was preferred by IREDA. Contentions The ASG arguing for IREDA primarily pressed two arguments before the Court. He argued that Clause 8 of the Guidelines makes the decisions of Committee final and binding. Thus, the Committee's decision to hold that the applicable tariff will be Rs. 15.84/kWh and would remain constant for a period of 25 years attained finality, more so because CSPDCL never challenged it. Further, the doctrine of waiver and acquiescene applied to the present case. CSPDCL accepted tariff of Rs. 15.84/kWh in its letter dated 28.06.2013. Subsequently, the same claims were pursued before the SERC and APTEL, where they were denied. In addition to this, CSPDCL filed the petition before the Single Judge in 2017, after about a period of two years, which could not have been entertained without deciding on the issue of estoppel, acquiescence, waiver, delay and laches. On the other hand, the Senior Counsel appearing for CSPDCL argued that the Appellant's reliance on the Committee's decision dated 15.03.2013 was misplaced as the decision of the Committee was beyond the scope of the powers of the Committee as per Clause 8 of the Guidelines. It was submitted that the decision of the Committee was contrary to the Guidelines wherein it was provided that GBI would be equal to the difference between the tariff determined by CERC and the base rate. As to the argument regarding waiver and estoppel, the Senior Counsel contended that there was no waiver or estoppel as CSPDCL had continuously agitated the issue across various forums.. Observations The Court observed that the two issues for its consideration were – a) whether the decision of the Committee dated 15.03.2013 was tenable in law and b) CSPDCL's claim before the Single Judge...

Tariff During Registration Was To Remain Fixed For 25 Years; CSPDCL Waived Its Rights: Delhi High Court Allows IREDA's Appeal Over GBI Scheme

Arpita Pande

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