VidhiSangh

Supreme Court of India · 16/02/2018

TRANSMISSION CORPORATION OF ANDHRA PRADESH LTD. AND OTHERS versus M/S. GMR VEMAGIRI POWER GENERATION LTD. AND ANOTHER

[2018] 10 S.C.R. 390 · 2018 INSC 162

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Summary

The Supreme Court held that “natural gas only” in the parties’ amended power-purchase agreement excluded RLNG, despite its being a form of natural gas. The contractual history, cost-sensitive purpose, correspondence and parties’ understanding showed an intention to use domestically available natural gas in its natural form. Exceptional short-term permission to use RLNG did not establish inclusion or waiver. The Court restored the Electricity Regulatory Commission’s order.

Issues

  1. Whether the PPA’s definition of fuel included RLNG.
  2. How contractual history, commercial context and the parties’ dealings affected interpretation.
  3. Whether exceptional permissions or the statutory natural-gas definition altered the result.

Held

Result

Appeal allowed. Appellate Tribunal judgment reversed and Commission’s order of 8 August 2013 excluding RLNG from the PPA fuel definition affirmed.

Judgment PDF: Supreme Court of India, [2018] 10 S.C.R. 390.