Termination of power purchase pact: PSERC’s order on relief to private firm set aside

Pointing out that the PSERC had issued its interim order without giving the appellant (PSPCL) an opportunity to be heard, the tribunal stated such a move was unjustified.

The Appellate Tribunal for Electricity (APTEL) has set aside an interim order passed by the Punjab State Electricity Regulatory Commission (PSERC) concerning a dispute over the termination of a power purchase agreement (PPA), in which relief was given to a private liquor manufacturer.

The PSERC had on March 15, 2024 granted relief to NV Distillers and Breweries Pvt Limited.

Pointing out that the PSERC had issued its interim order without giving the appellant (PSPCL) an opportunity to be heard, the tribunal held that such a move was unjustified and contrary to the principles of natural justice. The tribunal observed that the real issue before the PSERC was the validity of the termination of the PPA. “It is only when the main appeal is finally heard and allowed could the letter, whereby the PPA was terminated, have been set aside. Such an order could not have ordinarily been granted at the interlocutory stage of the proceedings,” read the order.

The tribunal concluded that the interim order passed by PSERC was unsustainable. In such circumstances, it set aside the impugned interim order, restoring the original position pending the final decision in the case.

The dispute began when the PSPCL entered into a power purchase agreement with NV Distillers and Breweries Pvt Limited. Over time, differences arose between the parties regarding the performance of the PPA, particularly “failure” of the private company to supply committed power to the PSPCL.

On February 15, 2024, the PSPCL issued a termination letter, formally ending the PPA. The private firm filed a petition before the PSERC on March 1, 2024, challenging the termination and seeking relief.

The PSERC on March 15, 2024 granted relief to the party and effectively put the termination on hold. This interim order was issued “without giving the appellant” an opportunity to respond.

The appellant approached the Appellate Tribunal for Electricity on April 1, 2024, arguing that PSERC’s order was unjustified. On April 25, 2025, the tribunal delivered its judgment. It held that PSERC should not have granted relief at an interim stage without hearing the appellant. It has asked to decide the petition afresh within three weeks.