LawDaily.org | Energy Law | 30 October 2026 | Appeal No. 55 of 2016
New Delhi: The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by M/s Bhoruka Power Corporation Limited (BPCL), refusing to re-determine the tariff of its 6 MW Small Hydel Power Project at Dadupur, Yamuna Nagar, Haryana, on account of the non-availability of the Full Supply Level (FSL) of 916 feet.
In its judgment dated 30 October 2026, the Tribunal upheld the order dated 18 December 2015 passed by the Haryana Electricity Regulatory Commission (HERC) in Case No. HERC/PRO-59 of 2014. The Commission had rejected BPCL’s petition seeking re-determination of tariff on the ground that the pond level could not be maintained at the FSL of 916 feet, which had been considered while designing the project.
The Tribunal held that the responsibility for carrying out the necessary investigations, verifying the project parameters and assessing the financial viability of the hydroelectric project rested upon the developer. It further observed that the distribution licensee could not be burdened with an enhanced tariff, and consequently consumers could not be made to bear the financial consequences of the developer’s failure to undertake proper due diligence.
The judgment was delivered by a Bench comprising Hon’ble Ms. Seema Gupta, Officiating Chairperson, and Hon’ble Mr. Virender Bhat, Judicial Member.
Background: 6 MW Small Hydel Project at Dadupur
The dispute relates to a small hydropower project established by BPCL on the Western Yamuna Canal (Lower) at Dadupur in Yamuna Nagar, Haryana.
On 7 June 1999, a tripartite Memorandum of Understanding (MoU) was executed between BPCL, the Haryana Renewable Energy Development Agency (HAREDA) and the Irrigation Department, Government of Haryana, for development of a 4 MW Small Hydel Project.
Subsequently, BPCL prepared a Detailed Project Report (DPR) in 2002 proposing a 6 MW project comprising four units of 1.5 MW each. HAREDA approved the DPR on 18 April 2003, subject to certain conditions.
The DPR estimated annual energy generation of approximately 31.5 million units (MUs), taking into consideration the project parameters and the availability of the required water level. The project was ultimately designed around an FSL of 916 feet.
On 10 July 2007, HERC approved the Power Purchase Agreement (PPA) and determined the tariff at:
₹2.80 per unit for the first 12 years; and
₹1.70 per unit for the 13th to 15th years.
The PPA was subsequently executed between BPCL and Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) on 3 March 2008. The project was commissioned on 19 March 2010.
The Core Dispute: Non-Availability of FSL of 916 Feet
According to BPCL, the project had been designed on the assumption that the Dadupur Pond would be maintained at an FSL of 916 feet. However, after commissioning, the required pond level could not be maintained because of seepage and waterlogging concerns affecting adjoining agricultural land and crops.
The Irrigation Department was reportedly unable to maintain the pond level at 916 feet because of apprehensions regarding damage to agricultural land. Consequently, the pond level was maintained at a lower level, approximately 912–913 feet.
BPCL contended that the reduction in pond level adversely affected the available head and, consequently, the electricity generation from the project. It argued that the project’s generation and financial viability had been assessed on the basis of the FSL of 916 feet and that the subsequent inability to maintain that level had fundamentally altered the basic parameters of the project.
The company therefore approached HERC seeking re-determination of the applicable tariff on the basis of the realistically achievable FSL and the corresponding reduction in generation.
Earlier Tariff Revision in 2010
An important aspect of the dispute was the earlier tariff revision allowed by HERC.
Before commissioning, BPCL had approached the Commission on 17 March 2010 seeking revision of the project cost on account of additional works and expenditure incurred for the project.
By order dated 8 September 2010, HERC revised the tariff from ₹2.80 to ₹3.18 per unit for the first 12 years and from ₹1.70 to ₹1.93 per unit for the 13th to 15th years.
The additional expenditure included costs associated with barrage gate works and repairs to existing gates, which were considered necessary to enable the developer to maintain the required plant load factor/capacity utilisation factor.
The said tariff revision was challenged before APTEL in Appeal No. 78 of 2011. However, by judgment dated 27 April 2012, the Tribunal upheld the Commission’s determination, holding that the final tariff was to be determined on the basis of the actual cost of the completed project and the applicable regulations.
A significant consideration in the present appeal was that, despite the project having already been commissioned and operational, BPCL had not sought revision of the design energy on account of the non-achievement of the FSL of 916 feet in its earlier tariff proceedings.
BPCL’s Submissions Before APTEL
BPCL argued that the inability to maintain the FSL of 916 feet was attributable to the Government’s failure to honour its undertaking under Clause 8 of the MoU.
According to the appellant, the Government had undertaken to allow pondage up to the FSL or allowable freeboard level for sustainable power generation. It contended that the maintenance of the required pond level was not an independent obligation of the developer.
The appellant further submitted that it had undertaken additional works at its own cost, including construction of a new gated regulator and renovation of the Additional Head Regulator gates, to facilitate maintenance of the required pond level.
It relied upon correspondence exchanged with HAREDA and the Irrigation Department, including the proceedings of a review meeting dated 24 July 2013, to contend that the authorities had acknowledged that the Dadupur Pond had been designed for an FSL of 916 feet but that the said level could not be maintained.
BPCL also relied upon the report prepared by WAPCOS concerning seepage and the remedial measures required to address the problem.
The appellant argued that the reduction in FSL was a change in the basic project parameters beyond its control and that the tariff should accordingly be re-determined under Section 62 of the Electricity Act, 2003, read with the applicable HERC Renewable Energy Tariff Regulations, 2010.
In support of its case, BPCL relied upon APTEL’s decisions in Greenyana Solar (P) Ltd. v. HERC and Patikari Power Ltd. v. HPERC, contending that project-specific tariff determination should reflect the actual economic and operational circumstances of the project.
HPPC Opposed Any Further Tariff Revision
Haryana Power Purchase Centre (HPPC), representing the interests of the Haryana distribution licensees, opposed the appeal.
HPPC contended that the dispute concerning maintenance of the FSL was essentially between BPCL and the Irrigation Department, as the alleged assurance regarding the pond level arose from the MoU to which HPPC was not a party.
It was pointed out that the PPA did not contain any stipulation requiring the distribution licensee to ensure maintenance of the FSL of 916 feet or to pay an enhanced tariff if the required pond level was not achieved.
HPPC further argued that the developer was responsible under the MoU for carrying out the necessary investigations, examining hydrological data, assessing project feasibility and strengthening the canal banks and related structures.
According to HPPC, BPCL had increased the originally envisaged project capacity from 4 MW to 6 MW and had itself prepared the DPR and finalised the project parameters. The developer was therefore required to verify whether the proposed FSL could actually be achieved and maintained.
HPPC also highlighted that the seepage issue was known before the project was established and that the relevant technical reports and investigations should have been considered at the DPR stage.
It further contended that BPCL had already obtained a tariff enhancement in 2010, which had attained finality after being upheld by APTEL in Appeal No. 78 of 2011. The appellant could not repeatedly reopen the tariff determination by raising additional claims at different stages.
HPPC relied upon, among other decisions, Puri Oil Mills Ltd. v. HPPC, GUVNL v. GERC and the judgments concerning the sanctity of power purchase agreements, arguing that the agreed tariff could not be altered to the prejudice of the distribution licensees and consumers.
APTEL Examined the Obligations Under the MoU
While considering the rival submissions, the Tribunal examined the relevant clauses of the MoU dated 7 June 1999.
Clause 3 placed the responsibility for carrying out further investigations and project-related works upon the company after execution of the MoU.
Clause 8 dealt with the creation of pondage up to the Full Supply Level or allowable freeboard level for sustainable power generation and also referred to strengthening of the upstream canal banks.
Clause 19 required the company to satisfy itself regarding hydrological data and the pattern of discharge, which could vary according to irrigation requirements. It further provided that the company could structure the power plant after considering those parameters and at its own risk.
Clause 21 required the company to make alternate arrangements for uninterrupted flow of water and provide the necessary controlling mechanism, including strengthening of the upstream structures and banks at its own cost.
After examining these provisions, the Tribunal observed that the responsibility for undertaking the requisite investigations and verifying the relevant project parameters rested upon BPCL.
The Tribunal noted that the developer had prepared the DPR and had itself proposed enhancement of the project capacity from the originally envisaged 4 MW to 6 MW. It had also estimated the design energy and the expected plant load factor on the basis of its own studies and investigations.
Tribunal Holds That the Developer Was Required to Verify the FSL
One of the principal findings in the judgment concerns the responsibility of a project developer to independently verify the Full Supply Level and other technical parameters before finalising the design and financial viability of a hydroelectric project.
The Tribunal observed that the Full Supply Level represents the maximum water level in a reservoir under normal operating conditions and is an important parameter for determining the available head and power generation.
It acknowledged the relationship between head, discharge and electricity generation. However, it held that the responsibility to revalidate the declared FSL and design the project accordingly rested with the developer.
The Tribunal observed that a hydroelectric project developer must undertake comprehensive and independent studies to verify the FSL and determine the design head, design discharge, installed capacity and tariff viability of the project.
It specifically referred to the need for hydrological yield analysis, topographical and geological surveys, sedimentation and silt-yield studies, and environmental and social impact assessments.
The Tribunal found that BPCL had increased the project capacity from 4 MW to 6 MW after undertaking its own studies and had estimated design energy of 31.5 MUs with a projected plant load factor of 59.95%.
In these circumstances, the developer could not proceed merely on an assumption that the FSL of 916 feet would be available without adequately verifying whether the same could realistically be maintained.
Earlier Seepage Concerns Were Relevant to the Assessment
The Tribunal also examined the DPR and the material relating to the seepage problem.
It noted that the DPR itself recorded that the Full Supply Level could not previously be achieved because of heavy leakage. Although the DPR referred to the completion of a new barrage, the Tribunal considered the earlier seepage concerns relevant to the developer’s responsibility to undertake proper investigations.
The Tribunal also referred to the findings recorded by HERC that the issue of FSL, site suitability and the achievable pond level for a 6 MW project had not been adequately examined during the revisions of the DPR.
According to the Commission’s findings, the developer should have assessed the likely seepage-related problems and the financial implications of the remedial measures at the project inception stage.
The Tribunal agreed with the Commission’s assessment that proper due diligence was necessary before finalising the project design and entering into the PPA.
APTEL Distinguishes Greenyana Solar and Patikari Power Judgments
BPCL relied upon Greenyana Solar (P) Ltd. v. HERC, Appeal No. 302 of 2024, decided on 23 April 2025, to argue that project-specific tariff determination should reflect the actual economic and operational realities of a project.
However, APTEL held that the factual circumstances in that case were distinguishable. The issue in Greenyana Solar concerned the allowable AC ratio in a solar project and the associated cost implications.
The Tribunal observed that, in the present matter, the project parameters had to be finalised by BPCL itself after undertaking proper due diligence. The appellant had prepared the DPR, proposed the design energy and estimated the project cost.
The Tribunal also considered Patikari Power Ltd. v. HPERC, Appeal No. 179 of 2010, decided on 23 April 2012.
In Patikari Power, the Tribunal had considered a situation where actual river discharge was substantially lower than the discharge anticipated at the planning and tendering stage, based on hydrological data furnished by the respondent entities.
APTEL distinguished that judgment on the ground that the DPR in the present case was not based upon hydrological data furnished by the distribution licensee. Under the MoU, the responsibility for conducting the requisite investigations and preparing the DPR rested upon BPCL.
Accordingly, the Tribunal held that the principle relied upon in Patikari Power did not assist the appellant in the facts of the present case.
PPA Did Not Guarantee FSL of 916 Feet
Another important aspect considered by the Tribunal was the absence of any provision in the PPA making the agreed tariff conditional upon the availability of an FSL of 916 feet.
The Tribunal observed that the PPA did not contain any clause stipulating that the distribution licensee would be liable to pay an enhanced tariff if the required FSL was not achieved.
It held that any deficiency in achieving the projected design energy could not be attributed to the distribution licensee when the project parameters had been finalised by the developer itself.
The Tribunal further observed that the dispute concerning the non-achievement of the FSL was not an inter se matter between BPCL and the distribution licensee. The distribution licensee could not be made responsible for the consequences of the dispute between the developer and the Irrigation Department.
Consequently, the financial burden of an enhanced tariff could not be passed on to the distribution licensee or ultimately to electricity consumers.
Earlier Tariff Determination Had Attained Finality
The Tribunal also relied upon the principle of finality in tariff determination and the sanctity of the PPA.
It noted that the tariff had already been revised by HERC through its order dated 8 September 2010, which was upheld by APTEL on 27 April 2012 in Appeal No. 78 of 2011.
The parties had acted upon the revised tariff, and no further challenge had been brought against the Tribunal’s judgment.
APTEL referred to its decision in GUVNL v. GERC, Appeal No. 279 of 2013, decided on 22 August 2014, concerning the principles of promissory estoppel, legitimate expectation and res judicata in the context of an agreed tariff.
The Tribunal observed that the appellant had earlier sought re-determination of tariff and had obtained an enhancement based on additional project costs. However, it had not sought revision of design energy on account of the non-achievement of the FSL of 916 feet in those proceedings.
In the Tribunal’s view, the tariff had attained finality between the parties and could not be reopened once again on the basis of the subsequent claim.
It also relied upon the principles laid down in Puri Oil Mills Ltd. v. HPPC, Appeal No. 90 of 2013, decided on 9 April 2014, concerning the responsibility of developers to assess the condition of canal infrastructure and the impermissibility of reopening tariff arrangements on account of matters falling within their contractual responsibilities.
The judgment also reiterated the importance of the sanctity of PPAs and the principle that agreed tariffs cannot be altered merely by invoking regulatory or inherent powers.
Additional Documents Filed After Conclusion of Hearing Not Accepted
The Tribunal also dealt with Interlocutory Application No. 1932 of 2026, filed by BPCL on 28 August 2026, seeking permission to place seven additional documents on record.
The documents included the Technical Evaluation Committee’s report dated 14 February 2003, the Chief Engineer’s letter dated 20 November 2006, the addendum to the MoU dated 9 March 2007, and various communications exchanged between BPCL and the Irrigation Department concerning the pond level and seepage.
The hearing in the appeal had concluded on 14 August 2026, and the parties had been granted time to file their written submissions.
APTEL observed that the additional documents were all prior to the impugned order and the filing of the appeal. The appellant had not adequately explained why they could not have been produced earlier despite due diligence.
The Tribunal held that a general query raised by the Bench during the hearing did not entitle a party to place additional documents on record after the matter had been reserved for judgment.
It further observed that the appellant could have sought time to address the query and produce the documents during the hearing itself, thereby giving the respondents an opportunity to respond.
Nevertheless, in the interest of justice, the Tribunal examined the documents and the objections raised by the respondents. On merits, it found that none of the documents guaranteed or assured an FSL of 916 feet to BPCL.
The Tribunal also noted that the issue of leakage was known to the appellant at the DPR stage and that the correspondence between BPCL and the Irrigation Department did not establish any liability on the part of the distribution licensee.
It accordingly concluded that the additional documents did not advance the appellant’s case for tariff enhancement at the expense of the distribution licensee and consumers.
Final Decision: Appeal Dismissed
After considering the MoU, PPA, DPR, earlier tariff orders, rival submissions and applicable judicial precedents, APTEL found no infirmity in the order passed by HERC.
The Tribunal held that BPCL had failed to establish grounds for reopening the tariff determination. The responsibility for verifying the project parameters, assessing the achievable FSL and determining the financial viability of the project rested with the developer.
It further held that the distribution licensee and consumers could not be burdened with an enhanced tariff on account of the developer’s failure to undertake proper due diligence.
Accordingly, APTEL dismissed the appeal and disposed of all pending interlocutory applications.
Key Takeaways from the Judgment
The judgment reiterates several important principles relevant to renewable energy and hydropower projects:
Due diligence by developers: A project developer is required to independently verify the technical and hydrological parameters forming the basis of its project design.
Verification of FSL: The Full Supply Level must be assessed through appropriate technical studies before finalising the installed capacity, design energy and financial viability of a hydropower project.
Responsibility under the MoU: Where the MoU places the responsibility for investigation, feasibility assessment and strengthening of canal infrastructure upon the developer, the developer cannot shift the consequences of its failure to undertake those obligations to the distribution licensee.
Sanctity of PPA: An agreed and finally determined tariff cannot be reopened merely because the developer subsequently seeks to revise the project parameters.
Consumer interest: The financial consequences of a developer’s failure to undertake adequate due diligence cannot automatically be passed on to the distribution licensee or electricity consumers through tariff enhancement.
Additional evidence at appellate stage: Documents that were available before the impugned order should ordinarily be produced at the appropriate stage. A general query from the Bench does not, by itself, justify filing additional documents after conclusion of the hearing.
Conclusion
The APTEL judgment in M/s Bhoruka Power Corporation Limited v. Haryana Electricity Regulatory Commission & Ors. reinforces the importance of proper project planning, technical verification and financial prudence in the development of hydropower projects.
The Tribunal has made it clear that developers must independently assess the technical conditions and risks associated with their projects before finalising the DPR and entering into PPAs. A subsequent shortfall in generation arising from project parameters that the developer was required to verify cannot, without a legally sustainable basis, become a ground for imposing an additional tariff burden on distribution licensees and consumers.
For Haryana’s power sector, the decision is particularly relevant to tariff disputes involving renewable energy projects, contractual allocation of project risks and claims seeking re-determination of tariff after the original tariff has attained finality.
Case Details
Case: M/s Bhoruka Power Corporation Limited v. Haryana Electricity Regulatory Commission & Ors.
Appeal No.: 55 of 2016
Impugned HERC Case: HERC/PRO-59 of 2014
Impugned Order: 18 December 2015
Judgment Date: 30 October 2026
Forum: Appellate Tribunal for Electricity (APTEL)
Bench: Ms. Seema Gupta, Officiating Chairperson, and Mr. Virender Bhat, Judicial Member
Outcome: Appeal dismissed; HERC’s order upheld.
Disclaimer: This article is intended for general legal information and educational purposes only. It is based on the judgment dated 30 October 2026 in Appeal No. 55 of 2016. Readers are advised to refer to the complete judgment for the authoritative findings and operative directions.
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