Supreme Court Imposes Cost Of Rs. 65 Lakhs On Punjab State Power Corp Ltd For Instituting Multiple Litigations To Wriggle Out Of Payment Obligations

The Bench comprising Justice Sanjay Kishan Kaul, Justice Sudhanshu Dhulia and Justice Aravind Kumar has observed, “We, thus, feel that some example must be set in such cases and the appeals are liable to be allowed with costs, which were actually incurred by the appellants. It was the aforesaid, which was the reason for us to call upon the parties to file the actual bill of costs.”

BACKGROUND FACTS

Disputes had arisen between Nabha Power Limited (“Appellant”) and Punjab State Power Corporation Limited (“Respondent”) regarding recovery of deductions of monthly tariff by the Respondent. Consequently, proceedings were initiated under the Electricity Act, 2003, which travelled from the Regulatory Commission to the Supreme Court. On 05.10.2017, the Supreme Court had decided the appeal in Nabha Power Limited (NPL) v. Punjab State Power Corporation Limited (PSPCL) and Anr., (2018) 11 SCC 508. The Respondent was directed to pay certain amounts to the Appellant.

However, the Appellant was not paid the amount. In the meanwhile, the Respondent filed Miscellaneous Application and Review petition which were dismissed. Contempt proceedings were initiated by the Appellant and were decided in its favour.

Thereafter, the Respondent filed proceedings before the Regulatory commission, seeking accounts and details of washing of coal; refund of principal amount of Rs. 386.80 crores and late payment surcharge. The Regulatory Commission held the petition to be maintainable as it amounted to fresh dispute between the parties.

The Appellant challenged the order of the Regulatory Commission on the ground that the issues were already adjudicated in previous round of litigations.

SUPREME COURT VERDICT

The Bench opined that the petition filed before the Regulatory Commission was yet another attempt of the Respondent to wriggle out of its obligations. Accordingly, the Court imposed a cost on the Respondent for raking up similar issue again which stood finally decided by the Court in its judgment dated 05.10.2017.

“We have, thus, no hesitation in coming to the conclusion that the impugned order, innocuous as it may seem, is not sustainable and this is yet another endeavour of the respondent to wriggle out of its obligation under the judgment dated 05.10.2017, repeatedly explained by various orders. This kind of endeavour can neither be appreciated nor left without consequences thereof. The dispute inter se the parties is in the nature of a contractual dispute. Normally, costs must go with the succeeding party in case of a contractual dispute. This is more so where one party repeatedly seeks to evade the rigors of the orders. In fact, the judgment dated 05.10.2017 itself dealt with the legal principles for interpretation of commercial contract exhaustively and those principles were then applied to the contract in question. The pricing of the coal was found to be the crux of the problem, which was adjudicated upon. It is this very issue which is sought to be raked up again.”

The appeal was allowed by the Court with costs actually incurred by the Appellant. In order to set an example in such cases, the Court called upon the Parties to file actual bill of costs. For an actual cost incurred to the tune of Rs.1,95,80,081/- by the Appellant who engaged multiple counsels, the Court awarded a cost of Rs. 40 lakhs to the same.

“We, thus, feel that some example must be set in such cases and the appeals are liable to be allowed with costs, which were actually incurred by the appellants. It was the aforesaid, which was the reason for us to call upon the parties to file the actual bill of costs. The Bills of cost have been filed by both the appellants, Nabha Power Limited and Talwandi Sabo Power Limited. There are, however, multiple counsels appearing for the appellant, Nabha Power Limited, and the total invoice amount is Rs.1,95,80,081/-. In the case of Talwandi Sahoo Power Limited the total invoice amount is Rs.1,67,40,563/-. The Bill of cost has also been filed by the respondent and the total invoice amount is Rs.34,81,500/-.”

The order of the Regulatory Commission has been set aside.

Case Title: Nabha Power Limited v Punjab State Power Corporation Limited

Citation : 2023 LiveLaw (SC) 876

 Click here to read the judgment