APTEL Cuts SCOD Extension For 74 MW Punjab Solar Projects, Partly Modifies Regulatory Order

The Appellate Tribunal for Electricity (APTEL) has delivered a significant judgment in a long-running dispute involving three solar power projects with a combined capacity of 74 MW in Punjab. The appeals were filed by Punjab Energy Development Agency against earlier orders issued by Punjab State Electricity Regulatory Commission in favor of M/s Mihit Solar Private Limited.

The dispute revolved around the Scheduled Commercial Operation Date (SCOD) of the projects and the release of the developer’s Performance Bank Guarantees. Under the original agreement, the solar projects were required to be commissioned by January 31, 2016. However, delays occurred during project execution, leading the developer to seek extensions under force majeure provisions.

Earlier, PSERC had granted extensions totaling 90 days after accepting several reasons put forward by the developer. These included a 72-day delay caused by grid-connectivity issues, an 11-day delay due to a stay order issued by a Civil Judge in Sardulgarh, and a 7-day delay linked to the Jat agitation. Based on these findings, PSERC also directed the release of the Performance Bank Guarantees submitted by the developer.

PEDA, supported by Punjab State Power Corporation Limited, challenged the commission’s decision before APTEL. The agencies argued that the developer itself was responsible for major delays, particularly in land procurement. According to the appellants, Mihit Solar took 101 days to submit valid land documents because the initially identified land was found to be involved in litigation and encumbered with bank loans. They argued that this showed a lack of proper due diligence on the part of the developer and should not qualify for any relief.

A major legal issue in the case involved Article 10.4 of the Implementation Agreement, which required the developer to issue a formal written notice within five days whenever a force majeure event occurred. PEDA argued that Mihit Solar failed to comply with this mandatory requirement. Instead of submitting proper force majeure notices, the developer had only sent general correspondence and updates regarding project difficulties. PEDA also relied on Supreme Court judgments to argue that compliance with notice provisions is a strict contractual requirement and non-compliance invalidates extension claims.

In response, Mihit Solar contended that both PEDA and PSPCL were fully aware of the problems being faced by the projects. The company argued that letters exchanged between the parties, including one dated May 12, 2015, along with joint meetings, adequately communicated the difficulties related to grid connectivity. The developer further argued that the agreement did not specify any penalty for failure to issue formal notices, making the requirement directory rather than mandatory.

After examining the contractual provisions and submissions from all sides, APTEL partly modified PSERC’s earlier order. The tribunal rejected the 11-day extension granted due to the civil court stay order because no proper force majeure notice had been issued for that specific event. As a result, the total extension was reduced from 90 days to 79 days, shifting the revised SCOD to April 19, 2016. Since the projects were commissioned before this revised deadline, APTEL upheld the remaining directions of PSERC, effectively bringing the dispute to a close.