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Repeated letters do not extend the period of limitation provided in law, SC

The SC on May 6, 2020 {CLP INDIA PVT. LTD. v. GUJARAT URJA VIKAS NIGAM LTD. & ANR.} held that it has been consistently ruled by the SC that repeated letters, or exchange of communications, do not extend the period of limitation, provided by law.

It was further held by the SC Bench, comprising of Justice S. RAVINDRA BHAT, Justice ARUN MISHRA & Justice VINEET SARAN, that parties can agree to terms as they deem appropriate, for generation and sale of electricity under Section 43A of the Electricity Supply Act,1948 except that the tariff is to be in accordance with the provision contained in Section 43A. 

The SC held that there is merit in CPL's submission that the earliest point in time, when the cause of action arose, was in May,1996, when Gujarat Urja rejected its contention that incentive was payable in terms of the PPA, notwithstanding the notification of 06.11.1995. The SC held that it does not find any merit in the submission of Gujarat Urja that the issue was kept alive, due to a series of communications.

The SC further held that the express provision for something, in an agreement, meant that other similar matters stood excluded. 

In the present case, the GERC, by its order held that Note 2 (introduced by the notification of 06.11.1995) was applicable to the project and thus deemed generation incentive is not payable to CLP. However, it permitted recovery of only for a period of three years prior to the date of filing of the petition: the recovery for the period prior to 14.09.2002 were held to be time-barred. 

The appeals under Section 125 of the Electricity Act, 2003 were in consideration before the SC in present case. One appeal has been preferred by the Gujarat Urja Vikas Nigam Ltd. (in short,"Gujarat Urja"or "GUVN”);the second has been preferred by CLP (India) Pvt. Ltd. ( in short, "CLP”).

The SC held that in the present case, the clear agreement between the parties was that interest on the sum of  Rs. 53.90 crores was payable for the specified period 01.07.2003 to 31.12.2009.Therefore, it was held that CLP's claim that any amount was payable, for any period prior to 01.07.2003, was not tenable. It was held that had CLP wished so, nothing prevented it to claim for it during negotiations and have it included as a term of the contract. The Court held that once having settled for a specified sum, on an amount (Rs. 53.90 crores) that was only fictionally a loan - and treated as such, for purpose of fixing interest payable, considering the equity infused, in excess of the tariff regulations, the absence of any like item, such as interest for prior period, precludes a claim.  Therefore, it was held that interest was per se not payable, but could be paid in terms of the tariff notification or the agreement. The Court held that no claim on any other legal or equitable considerations could have been made.

The SC held that the findings of the lower authorities are therefore, sound and reasonable. Both the appeals failed. They were accordingly dismissed.

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