APTEL Rejects Wind Firm’s Plea Over Pre-Agreement Power Supply

The Appellate Tribunal for Electricity (APTEL) has dismissed an appeal filed by Jindal Aluminium Limited, which sought compensation for wind energy injected into the Karnataka power grid in 2015, before formal agreements were signed. The Tribunal ruled that the conditions necessary for a claim under Section 70 of the Indian Contract Act, 1872, were not met in this case.

The dispute arose after Jindal Aluminium began injecting power from its 12 MW wind project into the state grid from October 4, 2015, despite executing a Wheeling and Banking Agreement (WBA) only on November 18, 2015. The company raised invoices worth over ₹40 lakh for the 8.97 lakh units of electricity supplied before the WBA came into effect. However, the Karnataka Electricity Regulatory Commission (KERC) had rejected the claim in 2019, holding that no compensation was payable for power injected in the absence of a binding agreement.

Jindal Aluminium had approached APTEL citing earlier tribunal rulings in similar cases, including Green Energy Association vs. MERC and Greenko Maha Wind Energy vs. MERC, where compensation had been granted under Section 70 of the Contract Act. In those rulings, APTEL held that the distribution licensee had benefited from the power injected into the grid and therefore was liable to pay.

Uniqueness of the case

However, in this case, APTEL found that the Karnataka distribution companies had not used the power for supply to consumers or for meeting Renewable Purchase Obligations. They had filed affidavits clearly stating non-utilisation, and APTEL noted that the precondition of ‘benefit derived’—a key element under Section 70—was absent.

APTEL also pointed to a prior communication from Karnataka Power Transmission Corporation Ltd. (KPTCL) dated October 1, 2015, informing the appellant that power injection without a WBA or SLDC approval would be at its own risk and without any payment obligation.

“By injecting power into the grid despite these explicit warnings, the Appellant cannot now claim compensation,” the bench observed.

Concluding that there was “no error or infirmity” in KERC’s earlier order, the Tribunal ruled that the appeal was “devoid of merit” and accordingly dismissed it.