APTEL Partly Allows PEDA's Appeal, Trims Solar Project SCOD Extension from 90 to 79 Days

APTEL upheld force majeure relief for grid connectivity and Jat agitation delays but disallowed 11 days granted for a civil court stay order, finding no valid notice under the Implementation Agreement.

The Appellate Tribunal for Electricity (APTEL) has partly allowed three appeals filed by Punjab Energy Development Agency (PEDA) against orders of the Punjab State Electricity Regulatory Commission (PSERC) that had granted a 90-day extension in the Scheduled Commercial Operation Date (SCOD) of solar PV projects developed by M/s Mihit Solar Private Limited. In a common judgment dated 18 May 2026, the Tribunal reduced the extension to 79 days, setting aside the 11-day condonation that PSERC had granted on account of a stay order passed by the Additional Civil Judge, Sardulgarh. The Tribunal found that no force majeure notice had been issued by the developer for that specific event, as required under Article 10.4 of the Implementation Agreement. The extensions for grid connectivity delay (72 days) and the Jat agitation (7 days) were upheld.

The Projects and the Dispute Before APTEL

In 2015, PEDA floated a Request for Proposal (RFP) inviting developers to set up an aggregate 250 MW of grid-connected Solar Photovoltaic Power Projects in Punjab, divided into three capacity categories. Mihit Solar was declared a successful bidder and was allocated a 24 MW project under Category II and two 25 MW projects under Category III, with Implementation Agreements (IAs) signed on 24 March 2015 and a Power Purchase Agreement (PPA) executed on 31 March 2015.

Under Article 6.2(VII) of the IA, the SCOD was fixed at ten months from the date of signing the PPA, placing the deadline at 30 January 2016. Mihit Solar deposited Performance Bank Guarantees (PBGs) totalling Rs 9,60,00,000 for the 24 MW project and Rs 20,00,00,000 for the two 25 MW projects.

The projects were not commissioned by 30 January 2016. Mihit Solar filed three petitions before PSERC under Section 86(1)(f) of the Electricity Act, 2003, seeking extension of the COD to 30 June 2016, a declaration of tariff at Rs 7.06/kWh under the PPA, and a direction restraining PEDA from invoking the PBGs. PSERC, by orders dated 18 August 2016, granted a 90-day SCOD extension (to 30 April 2016) and directed PEDA to release the PBGs, with interest at 0.042% per day for delay beyond seven working days. PEDA challenged all three orders before APTEL.

PEDA's Case: Land Delay Exceeded Force Majeure Period, Notices Were Defective

PEDA's primary contention was that the delay in commissioning was entirely attributable to the developer's own failures. The LOA dated 25 February 2015 required Mihit Solar to submit land documents within 90 days. The developer submitted them only on 4 September 2015, a delay of 101 days. PEDA argued that this developer-caused delay alone exceeded the entire 90-day extension PSERC had granted.

PEDA further argued that Mihit Solar had never issued a force majeure notice within the five-day window prescribed by Article 10.4 of the IA. The article required the affected party to give written notice describing the particulars of the force majeure event as soon as practicable, but not later than five days from the date of awareness. PEDA relied on APTEL decisions in Swasti Power Engineering Ltd. v. PTC India Ltd., Punjab State Power Corporation Ltd. v. PSERC, Omega Infraengineers Pvt. Ltd. v. PSERC, and Earth Solar Pvt. Ltd. v. PSERC, as well as the Supreme Court's ruling in Chamundeshwari Electricity Supply Company Ltd. v. Saisudhir Energy Chitradurga Pvt. Ltd., 2025 SCC OnLine SC 1816, all of which treated timely force majeure notice as a condition precedent.

On the Jat agitation specifically, PEDA pointed out that the letter notifying it of the agitation was dated 22 February 2016, which was after the original SCOD of 30 January 2016, and therefore could not ground a force majeure claim. On the civil court stay order, PEDA submitted that no notice at all had been issued under Article 10.4 for that event.

PSPCL (Respondent No. 2) supported PEDA, contending that the IA and PPA contained no deeming provision allowing general correspondence to be treated as force majeure notices, and that the State Commission had acted contrary to settled law.

Mihit Solar's Defence: Substance Over Form, and No Consequence for Non-Compliance

Mihit Solar argued that PEDA had continuous and contemporaneous knowledge of the grid connectivity issue from as early as 11 March 2015. A letter dated 12 May 2015 followed by a joint meeting on 14 May 2015 attended by PEDA and PSPCL, it submitted, satisfied the essential ingredients of Article 10.4 even if the letter was not expressly styled as a “Force Majeure Notice.” Reliance was placed on the Supreme Court's decision in Savita Chemicals v. Dyes and Chemical Workers' Union and Anr., (1999) 2 SCC 143, for the proposition that substance, not nomenclature, determines the character of a notice.

Mihit Solar also argued that Article 10.4 prescribed no consequence for non-compliance, and therefore the notice requirement was directory, not mandatory. It relied on Administrator, Municipal Committee v. Ramji Lal Bagla and Ors., (1995) 5 SCC 272, and State of U.P. v. Manbodhan Lal Srivastava, 1957 SCC OnLine SC 4. It further distinguished the Chamundeshwari judgment on the ground that the force majeure clause in that case expressly prescribed consequences for non-compliance, whereas Article 10.4 of the IA did not.

How APTEL Reasoned on Each Force Majeure Event

Grid connectivity (72 days): APTEL found that PEDA had been kept continuously informed about the connectivity dispute at the 66 kV substation through a series of communications from 13 March 2015 to 12 May 2015, and had actively intervened to facilitate a resolution. The Tribunal held that the underlying purpose of the Article 10.4 notice requirement — enabling the counterparty to verify the event and take mitigation steps — was entirely fulfilled through those communications and the joint meeting. To allow PEDA to rely on the absence of a formally styled force majeure notice when it had actively participated in resolving the very dispute, and when the connectivity issue arose from PEDA's own RFP representation, would, the Tribunal held, be to allow PEDA to take advantage of its own wrong. APTEL distinguished the Chamundeshwari ruling on the basis that in that case the force majeure events were not of a nature about which the counterparty could be attributed knowledge despite non-service of notice. The 72-day condonation was upheld.

Jat agitation (7 days): APTEL accepted that the letter notifying PEDA of the Jat agitation was dated 22 February 2016, after the original SCOD of 30 January 2016. However, since the Tribunal had already upheld the 72-day extension for grid connectivity, the SCOD was extended beyond 30 January 2016 by that period. The Jat agitation, which occurred from around 20 February 2016 with most of the state under curfew, fell within the extended COD period. The 7-day condonation was upheld.

Civil court stay order (11 days): A stay order was granted by the Additional Civil Judge, Sardulgarh on 20 November 2015, restraining Mihit Solar from undertaking tower erection work; it was vacated on 1 December 2015. APTEL found that this was a non-political force majeure event and that Mihit Solar had admittedly issued no force majeure notice under Article 10.4 for this event. The Tribunal accepted PEDA's submission and set aside the 11-day condonation.

Land Delay: Not Determinative in This Judgment

APTEL noted the contractual framework on land documents. The LOA required submission within 90 days of its issue date of 25 February 2015. The IA under Article 6.2(vi) required land documents within 90 days of signing the PPA. Article 9.1(a) of the IA provided for termination and forfeiture of the entire performance security if land documents were not submitted within that period. Mihit Solar submitted land documents only on 4 September 2015, a delay of 101 days, and acknowledged in a letter dated 21 September 2015 that the originally identified land was affected by litigation and encumbrances, requiring it to finalise an alternate parcel. The Tribunal recorded these facts but the operative conclusion on the appeals turned on the force majeure notice analysis rather than on the land delay as a standalone ground for dismissal.

Outcome

APTEL modified the three PSERC orders dated 18 August 2016 to the limited extent of disallowing the 11-day condonation for the civil court stay order. The SCOD extension is reduced from 90 days to 79 days, placing the extended SCOD at 19 April 2016. Since the projects had been commissioned before 19 April 2016, the remaining directions in the PSERC orders — including the direction for release of the Performance Bank Guarantees — were upheld. All three appeals and any pending interlocutory applications were disposed of accordingly.