A.P. POWER COORDINATION COMMITTEE & ORS. versus MIS. LANCO KONDAPALLI POWER LTD. & ORS.
[2015] 12 S.C.R. 447, Supreme Court of India, 2015
Outcome: Dismissed (Dismissed)
Segment: Facts
[2015] 12 S.C.R. 447 
A.P. POWER COORDINATION COMMITTEE & ORS. 
A 
v. 
MIS. LANCO KONDAPALLI POWER LTD. & ORS. 
(Civil Appeal No. 6036 of 2012) 
OCTOBER 16, 2015 
[VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.] 
B 
Electricity Act, 2003 - s. 86(1 )(f), 17 4 - Limitation Act, 
1963 - ss. 3, 14, Schedule - Disputes between /icencees c 
and power generating company- Bill for capacity charges-
Claim for reimbursement of minimum alternate Tax (MAT) -
Whether the Limitation Act, s. 3 and the Schedule would 
apply to any action instituted before the Commission uls. 
86(1)(f) - Whether the impugned order passed by APTEL D 
permitting application of principles emerging from s. 14, is 
against law - Whether the claim for reimbursement of MAT 
is in contravention of relevant terms and conditions of the 
Power Purchase Agreement (PPA) - Held: A claim coming 
before the Commission cannot be entertained or allowed if it E 
is barred by limitation prescribed for an ordinary suit before 
the civil court - However, in appropriate case, a specified 
period may be excluded on account of principle underlying 
salutary provisions like s. 5 or 14 - Further, such limitation 
upon the Commission would be only in respect of its judicial F 
power uls. 86(1 )(f) and not in respect of its other powers or 
functions which may be administrative or regulatory - As 
regards order passed by APTEL, in law, the APTEL could 
grant exclusion of certain period on the basis of principles ul G 
s. 14 - On facts, AP
TEL adopted a just and lawful approach 
in examining the relevant facts and in excluding the entire. 
period claimed by respondent which starts from the notice 
for arbitration dated 8.9.2003 given by the respondent, till 
the application of the respondent u/s. 11 of the Arbitration H
448 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A Act before the High Court was finally disposed of on 
18. 3. 2009 - Challenge to impugned order in respect of views 
taken on the issue of limitation in the light of principles of s. 
14 fails - As regards the claim for reimbursement, entire 
phraseology used in Article 3.8 of the PPA clarifies that 
B parties were aware that tax regime keeps changing and 
therefore any advance income tax payable for the income 
from the project only had to be reimbursed by the Board -
As a successor of the Board the appeliant cannot avoid the 
liability to reimburse advance income tax paid by_ the 
C respondent, on the ground that MAT was a new variety of tax 
concept introduced subsequently in which minimum tax 
became payable on the basis of mere book profits of even 
power generating companies - It cannot be said that such, 
0 
tax is not on income from the project and thus, not covered 
by Article 3.8- Taxable income became amenable to MAT 
on account of s. 115JB - Claim for MAT covered by Article 
3. 8 and payable as such when requisite conditions stand 
E 
~~~d 
. 
Dismissing the appeals, the Court 
HELD: 1.1 There is no possibility of any difference 
of opinion in accepting that on account of judgment of 
this Court in Gujarat Urja the Commission has been 
F elevated to the status of a substitute for the Civil Court 
in respect of all disputes between the licencees and 
generating companies. Such dispute need not arise from 
the
exercise of powers under the Electricity Act. Even 
claims or disputes arising purely out of contract like in 
G the instant case have to be either adjudicated by the 
Commission or the Commission itself has the discretion 
to refer the dispute for arbitration after exercising its 
power to nominate the arbitrator. A statutory authority 
H like the Commission is also required to determine or
A.P. POWER COORDINATION COMMITTEE v. LANCO 
449 
KONDAPALLI POWER LTD. 
decide a claim or dispute either by itself or by referring it A 
to arbitration only in accordance with law and thus 
Section 174 and 175 of the Electricity Act assume 
relevance. Since no separate limitation has been 
prescribed for exercise of power under Section 86(1)f) 
nor this adjudicatory power of the Commission has been B 
enlarged to entertain even the time barred claims, there 
is no conflict between the provisions of the Electricity 
Act and Limitation Act to attract the provisions of Section 
17 4 of the Electricity Act. In such a situation on account 
of provisions in Section 175 of the Act or even otherwise C 
the power of adjudication and determination or even the 
power of deciding whether a case requires reference to 
arbitration must be exercised in a fair manner and in 
accordance with law. In the absence of any provision in 
the Electricity Act creating a new right upon a claimant. o· 
to claim even monies barred by law of limitation, or taking 
away a right of the other side to take a lawful defence of 
limitation, in the light of nature of judicial power 
conferred on the Commission, claims coming for E 
adjudication before it cannot be entertained or allowed 
if it is found legally not recoverable in a regular suit or 
any other regular proceeding such as arbitration, on 
account of law of limitation. This view is taken not only 
because it appears to be more just but also because
F 
unlike Labour laws and Industrial Disputes Act, the 
Electricity Act has no peculiar philosophy or inherent 
underlying reasons requiring adherence to a contrary 
view. [Para 29] [489-B-D, H; 490-A-F] 
1.2Aclaim coming beforethe Commission cannot 
be entertained or allowed if it is barred by limitation 
prescribed for an ordinary suit before the civil court. But 
in appropriate case, a specified period may be excluded 
G 
on account of principle underlying salutary provisions H
450 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A like Section 5 or 14 of the Limitation Act. Further, such 
limitation upon the Commission on account of the 
decision in V.R.Kal/iyanikutty would be only in respect 
of its judicial power under clause (f) of sub-section (1) of 
s. 86 of the Electricity Act, 2003 and not in respect of ifs 
B other powers or functions which may be administrative 
or regulatory. [Para 30] [491-C-E] 
1.3 The respondent rightly appreciated the hurdle 
of limitation in its way when such an objection was taken 
C by the appellant and it rightly chose to seek exclusion 
of the period it was pursuing arbitration proceeding 
before the High Court, on the basis of principles 
underlying Section 14 of the Limitation Act. [Para 31] [491-
F-G] 
D 
1.4 In law, the APTEL could grant exclusion of 
certain period on the basis of principles under Section 
14 in view of law laid down or clarified in M.P. Steel 
Corporation. On facts, there is no difficulty in holding that 
E APTEL has adopted a just and lawful approach in 
examining the relevant facts and in excluding the entire 
period claimed by the respondent which starts from the 
notice for arbitration dated 8.9.2003 given by the 
respondent, till the application of the respondent under 
F Section 11 of the Arbitration Act before the High Court 
was finally disposed of on 18.3.2009. The issue whether 
the first notice dated 8.9.2003 or the next notice dated 
26.3.2004 should be treated as notice for
arbitration for 
the purpose of Section 21 of the Arbitration Act was 
G rightly not pursued further by the counsel. But since this 
issue was touched, the entire Article 14 of the PPA as 
well as the notice dated 8.9.2003 is looked at and there 
is no difficulty in holding it as the notice for arbitration 
which amounted to initiation of arbitral proceedings as 
H contemplated by Section 21 of the Arbitration Act. The
A.P. POWER COORDINATION COMMITTEE v. LANCO 
451 
KONDAPALLI POWER LTD. 
submission on behalf of appellant that after the judgment A 
of this Co.urt in Gujarat Urja on 13.3.2008, the 
continuance of the arbitral proceedings before the High 
Court at the instance of the respondent should not be 
accepted as bona fide and that the commission was 
justified in not excluding this period of about one year B 
on the ground that it was not bona fide and in such facts 
APTEL should not have taken a contrary view, cannot 
be accepted. [Para 32] [492-A-E] 
1.5 The appellant had notice of the arbitral C 
proceeding and after judgment in. Gujarat Urja, the 
appellant also took no steps to get the application under 
Section 11 listed and disposed of earlier to 18.3.2009. 
The averments and the materials are not sufficient to 
establish the claim of the appellant that the proceeding D 
ceased to be bona fide after 13.3.2008. As a 
consequence thereof, the challenge to impugned order 
in respect of views taken on the issue of limitation in the 
light of principles of Section 14 of the Limitation Act fails. 
[Para 32][493-C-D] 
E 
1.6 The issue whether MAT is covered by Article 3.8 
of the PPA was clearly covered by Arbitration notice. The 
filing of upto date claims through amendment or 
otherwise before the Arbitral Tribunal could not happen F 
for the obvious reason that application under Section 
11 of the Arbitration Act itself remained pending till 
18.03.2009 before the High Court and
thereafter before 
the Commission. [Para 33] [494-A-B] 
G 
1.7 The claim for reimbursement of MAT for the 
period 2001-2005 was rejected by the Commission on 
the ground of limitation and after impugned order by 
APTEL reversing such order, that claim stands remitted. 
to the Commission for passing a consequential order. H
452 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A The claims for other periods have been allowed by the 
Commission. On account of the view indicated earlier 
upholding the order of APTEL on the issue of limitation, 
the claim of MAT for 2001-2005 cannot be treated as 
barred by limitation. Thus the claim of MAT for entire 
B concerned period that is from 2001-2012 will be covered 
by the decision on Merits of Claim relating to MAT. The 
submission that MAT cannot be covered by the 
provisions in Article 3.8 of the PPA providing for claims 
for taxes on income because the appellant had not 
C foreseen such eventuality in view of the then prevailing 
tax regime under which income from such power 
projects stood exempted, is noticed only to be rejected. 
The entire. phraseology used in Article 3.8 of the PPA 
0 
leaves no manner of doubt that parties were aware that 
tax regime keeps changing and therefore any advance 
income tax payable for the income from the project only 
had to be reimbursed by the Board. As a successor of 
the Board the appellant cannot avoid the liability to 
E reimburse advance income tax paid by the respondent, 
on the ground that MAT was a new variety of tax concept 
introduced subsequently in which minimum tax became 
payable on the basis of mere book profits of even power 
generating companies. The argument that such tax is 
F not on income from the project and thus, not covered 
by Article 3.8 of the PPA is without any substance. 
[Para 34] [494C-H;
495-A] 
1.8 The objective of levying MAT, as declared by the 
G Income Tax Department is to bring into the tax net "Zero 
Tax Companies" which inspite of having earned 
substantial book profits and having paid handsome 
dividends, do not pay any tax due to various tax 
concessions and incentives provided under the Income 
H Tax Law. It is no body's case that in fact the respondent
AP. POWER COORDINATION COMMITTEE v. LANCO 
453 
KONDAPALLI POWER LTD. 
had not generated income from the project during the A 
relevant years. The taxable income, of course, became 
amenable to MAT on account of Section 115JB. The 
legislative changes in respect of MAT show that it came 
into force initially with e·ffect from 1.4.1988 by 
introduction of Section 115J in the Income Tax Act, 1961 
B 
but this provision was amended to exempt power 
generating companies with.effect from 1.4.1989 and from 
1.4.1991 MAT became inapplicable because of deletion 
of Section 115J which was reintroduced with effect from 
1.4.1997 by insertion of Section 115JA. But it was not C 
made applicable ~o power generating companies till 
31.3.2001. However, Section 115JAwas withdrawn and 
Section ·115JB was inserted with effect from 1.4.2001 to 
make MAT applicable to all targeted corporate entities 0 
including power generating companies. The submission 
on behalf of the appellant that Section 115JB is a tax not 
on profit but of different character is based on 
misconception. No doubt this Section has a special 
provision for payment of tax by certain companies on E 
the basis of its book profit which is deemed to be the 
total income of the assessee and is subjected to income 
tax at a specified rate. The provisions of Sections 115JA 
and 11 SJB have been also construed as a self-contained 
code But that does not change the basic nature of the F 
provision. It remains a provision under the
Income Tax 
Act and what is levied is income tax on the assessment 
of income as per such a special provision. [Para 35] 
[495-B-H; 496-A] 
1.9 Article 1.4 of the PPA provides inter alia that 
reference to any 'Law' shall be construed as a reference 
G 
to such Law as from time to time amended or re-enacted. 
This general provision in our view is sufficient to take 
care of all the taxes on income under Article 3.8 of the H
454 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A PPA notwithstanding different rates of income tax or 
other changes which may be brought about in the 
Income Tax Act. This view commends itself because 
such change in Law relating to Income Tax does not 
require any additional claim to be raised by the power 
B generating companies. There is no specific amount-or 
rate which is to be reimbursed by the Board. Rather, the 
entire advance income ·tax payable requires 
reimbursement on account of Article 3.8 of the PPA 
provided of course that the accounts are maintained in 
C the manner required by the Agreement so that tax is only 
on the basis of income from the project. No such dispute 
has been raised in the instant case. (Para 36] (496-B-D] 
1.10 The claim of the appellant that liability of MAT 
D is on account of change in Law and therefore required 
the respondent to adopt the procedure for making claims 
under Article 11.4 of the PPA does not appeal for the 
aforesaid reasons. The entire stipulation in Article 11.4 
of the PPA is in respect of additional or reduced 
E expenditures or costs which have not been catered for 
and arise later due to change in Law. The burden on 
account of income tax as per Article 3.9 of the PPA cannot 
be treated as additional or reduced burden because the 
entire actual advance income tax payable for the project 
F is required to be reimbursed by the Board. It is immaterial 
whether the income tax payable is high or low in any 
particular
year. When there is already a special provision 
in respect of entire payable taxes on income under Article 
3.8 of the PPA, that should have precedence over the 
G general provisions in Article 11.4 of the PPA. [Para 37] 
(496-E-H] 
1.11 Section 2(43) defines 'Tax' to mean income tax 
chargeable under the provisions of Income Tax Act and 
H 'Total Income' has been defined with reference to Section
A.P. POWER COORDINATION COMMITTEE v. LANGO 
455 
KONDAPALLI POWER LTD. 
5 which enlarges the scope of total income not only to A 
income received. or accrued but also deemed to be 
received or deemed to be accrued in India (for a resident). 
Simply because the exemption earlier granted to power 
generating companies has been withdrawn so as to 
subject them to income tax liability under a special B 
provision, cannot lead to any inference as suggested 
on behalf of the appellant that it is not an income tax but 
some other tax which is levied under s.115JB of the 
Income Tax Act. Hence the claim for MAT covered by 
Article 3.8 of the PPA and payable as such when C 
requisite conditions stand satisfied. [Para 38] [497-B-D] 
M.P Steel Corporation v. Commissioner of Central 
Excise (2015) 7 SCC 58; State of Kera/av. V.R. 
Kalliyanikutty 1999 (2) SCR 372: (1999) 3 SCC 
657 - relied on. 
Gujarat Urja Vik as Nigam Ltd. v. Essar Power Ltd. · 
2008 (4) SCR 822: (2008) 4 sec 755; Tamil 
Nadu Generation & D[stribution Corpn. Ltd. v. 
PPN Power Generating Co. (P) Ltd. 2014 (4) 
SCR 667: (2014) 11 SCC 53; Hans Raj Gupta v. 
Dehra Dun-Mussoorie Electric Tramway Co. Ltd. 
AIR 1933 PC 63; New Delhi Municipal Committee 
v. Ka/u Ram 1976 (0) Suppl. SCR 87:(1976) 3 
SCC 407; Kihoto Hallahan v. Zachillhu 1992 (1) 
SCR 686: 1992 Supp. (2) SCC 651; Thakur Jugal 
Kishore Sinha v. Sitamarhi Central Co-operative 
Bank Ltd. 1967 (3) SCR 163; Brajnandan Sinha 
v. Jyoti Narain AIR 1956 SC 66: 1955 SCR
955; 
P Sarathy v. State Bank of India 2000 (1) Suppl. 
SCR 402: (2000) 5 SCC 355; Commissioner of 
Sa/es Tax v. Parson Tools and Plants (1975)4 
SCC 22; Ujjam Bai v. State of U.P AIR 1962 SC 
D 
E 
F 
G 
H
456 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
1621 :1963 SCR 778; Jagannath Prasad v. State 
of UP AIR 1963 SC 416: 1963 SCR 850; Mukri 
Gopalan v. Cheppilat Puthanpurayil Aboobacker 
1995 (2) Suppl. SCR 1: (1995) 5 sec 5; 
Consolidated Engg. Enterprises v. Irrigation Deptt. 
2008 (5) SCR 1108: (2008) 7 SCC 169; Trans 
Mediterranean Airways v. Universal Exports 2011 
(14) SCR 47: (2011) 10 SCC 316; Henry 
Hauenstein v. John.A. Lynham 100 U.S. 483; Re. 
Jarvis (Deceased) Edge v. Jarvis (1958) 2 All.ER 
336; Bombay Gas Co. Ltd. v. Gopal Bhiva 1964(3) 
SCR 709; Hindustan Times Ltd. v. Union of India 
1998 (1) SCR 4:(1998) 2 SCC 242; State of 
Gujarat · v. 
Patil Raghav Natha 
1970 
(1) SCR 335:(1969) 2 SCC 187; Ram Chand v. 
Union of India 1993 (2) Suppl. SCR 558: (1994) 
1 SCC 44; Bombay Dyeing & Manufacturing Co. 
Ltd. v. The State of Bombay AIR 1958 SC 
328:1958 SCR 1122; Mis. Tilokchand and 
Motichand v. H.B. Munshf (1969) 1 SCC 110; 
Ajanta Pharma Limited vs. CIT 2010 (11) 
SCR 404:2010 (9) SCC 455- referred to. 
Case Law Reference 
2008 (4) SCR 822 
Referred to. 
Para 5 
2014 (4) SCR 667 
Referred to. 
Para 14 
1999 (2) SCR 372 
Referred to. 
Para 17 
AIR 1933 PC 63 
Referred to. 
Para 17 
1976 (0) Suppl. SCR 87 
Referred to. 
Para 18 
1992 (1) SCR 686 
Referred to. 
Para 19 
1967 (3) SCR 163 
Referred to. 
Para 19
A.P. POWER COORDINATION COMMITTEE v. LANCO 
457 
KONDAPALLI POWER LTD. 
1955 SCR 955 
Referred to. 
Para 19 
A 
2000 (1) Suppl. SCR 402 
Referred to. 
Para 20 
(2015) 1 sec 58 
Relied on. 
Para 20 
(1975) 4 sec 22 
Referred to. 
Para 20 
B 
1963 SCR 778 
R~ferred to. 
Para 20 
1963 SCR 850 
Referred to. 
Para 20 
1995 (2) Suppl. SCR 1 
Referred to. 
Para 20 
c 
2008 (5) SCR 1108 
Referred to. 
Para 20 
2011 (~4) SCR 47 
Referred to. 
Para 21 
100 U.S. 483 
Referred to. 
Para 26 
D 
(1958) 2 All.ER 336 
Referred to. 
Para 26 
1964(3) SCR 709 
Referred to. 
Para 26 
1998 (1) SCR 4 
Referred to. 
Para 26 
E 
1970 (1) SCR 335 
Referred to. 
Para 26 
1993 (2) Suppl. SCR 558 
Referred to. 
Para 26 
1958 SCR 1122 
Referred to. 
Para 27 
F 
(1969) 1sec110 
Referred to. 
Para 27 
2010 (11) SCR 404 
Referred to. 
Para 35 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
6036 of 2012 
G 
From the Judgment and Order dated 02.07.2012 of the 
Appellate Tribunal for Electricity, New Delhi in Appeal No. 129 
of 2011 
WITH 
H
458 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
C. A. Nos. 6061and6138 of 2012 
C. A. No. 9304 of 2013 and C. A. No. 6835 of 2015 
V. Giri,A. Subba Rao, ManavVohra, Svadha Shankar, 
K. L. D. S. Vinober, P. Siva Rao, Rakesh K. Sharma, Anand 
8 K. Ganesan, Swapna Sheshadri, K. V. Balakrishnan, K. V. 
Mohan for the Appellants. 
C. A. Sundaram, Jayant Bhushan, Vikas Singh, S. B. 
Upadhyay, Sakya Singha Chaudhuri, Avijeet Lala, Kanika 
C Chugh, Saloni Tangri, Rohini Musa, Zafar lnayat, D. Bharathi 
Reddy, Shivani Khandekar, Sakya Singha Chaudhuri, Vishrov 
Mukehrjee, Apoorva Misra, ·Rohit Venkat, Deipika Kalia, Sum it 
Kumar Vats, Pukhrambam Ramesh Kumar, Pawan Upadhyay, 
Kaustav P. Pathak, Sarvjit Pratap Singh, Sharmila Upadhyay 
D for the Respondents. 
The Judgment of the Court was delivered by 
SHIVAKIRTI SINGH, J.1. The leading matter -
E C.A.No.6036 of 2012 as well as C.A.No.6061 of 2012 are 
statutory appeals arising out of a common order dated 
2. 7.2012 passed by Appellate Tribunal for Electricity (for short, 
'APTEL') whereby pleas under Section 14 of the Limitation 
Act, 1963 to explain the alleged delay in preferring claims by 
F the common respondent- M/s. Lance Kondapalli Power Ltd. 
(for brevity referred to as 'M/s. LAN CO') a power generating 
company before the Andhra Pradesh Electricity Regulatory 
Commission (hereinafter referred to as 'the Commission') has 
been accepted and as a result the main claim in the leading 
G matter relating to Bill for Capacity
Charges and in the other 
appeal for Minimum Alternate Tax (MAT) for 2001-2005 have 
been remanded for a follow up order by the Commission on 
the actual claims and interest. In respect of MAT, a concession 
on merits was recorded in respect of period 2006-2009 and 
H
A.P. POWER COORDINATION COMMITTEE v. LANCO 
459 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
for the earlier period (2001-2005) the contest was confined A 
only to issue of limitation, as evidenced by Original Order of 
Commission dated 13.6.2011. Hence, through a SLP leading 
to C.A.No.6835 of 2015, the Appellant has chosen to make a 
direct challenge to aforesaid order to explain and overcome 
.the alleged concession in respect of claim for reimbursement B 
of MAT for the entire period of 2001-2009. C.A. No.6138 of 
2012 is a statutory appeal to again challenge MAT for 2006-
2009 but directed against appellate order dated 20.7.2012 
by APTEL. The last matter, C.A.No.9304 of 2013 arises out 
of a SLP against the original order of Commission dated C 
8.8.2013 relating to MAT claim for the period 2009-2012. 
Since issues are same or similar between the same appellant 
and respondent in all these appeals, they have been heard 
together and shall be governed by this common judgment. 0 
Unless otherwise indicated the facts·have been noted from 
the records of the main matter, i.e., C.A.No.6036 of2012. 
2. Instead of merits of bills raised by M/s. LANCO for 
capacity charges the issue of limitation has assumed greater 
significance and has thrown up two important points. First, 
E 
whether the Limitation Act is applicable to a claim before the 
Commission and if the answer is in positive, then second, 
whether APTEL's order reversing the views of Commission. 
and accepting
claim under Section 14 of the Limitation Act is 
F 
in accordance with law or not. ft is not in dispute that if the 
order of APTEL is upheld, the issue of correctness or validity 
of capacity charges will stand remanded for decision by the 
Commission in accordance with law. So far as claim of M/s. 
LANGO for reimbursement of MAT for the period 2001-2005 G 
is concerned, it shall stand rejected if APTEL's order on the 
issue of limitation is reversed, otherwise such claim for the 
aforesaid period as well as for later period upto 2012 will be 
governed by the present judgment on the issue of legality and 
admissibility of claim for MAT. 
H
460 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
3. Before adverting to the issues noticed above and the 
rival contentions, it will be useful to notice the essential facts 
relevant for deciding the issues. M/s. LANGO is engaged in 
the generation and sale of electricity. Its Registered Office is 
at Hyderabad and it has set up its power project at Kondapalli 
B Industrial Development Area in Krishna District of Andhra 
Pradesh. A.P. Power Co-ordination Committee, the appellant 
no.1, as the name suggests, was constituted on 07.06.2005 
to ensure coordination between the four distribution 
companies of Andhra Pradesh who are appellant nos.3 to 6. 
C M/s. Transmission Corporation of Andhra Pradesh 
(APTRANSCO) is the second appellant. At the relevant time 
the appellant no.2 was engaged in procurement of power for 
the Distribution Companies. In the first phase of power sector 
D reforms, Andhra Pradesh State Electricity Board was 
unbundled into Generation and Transmission Corporation and 
subsequently the four Distribution Companies were notified 
by the Government on 31.3.2000 on account of unbundling of 
the Transmission Corporation in the subsequent phase of 
E reforms. 
4. There is no dispute between the parties that the 
erstwhile A. P. State Electricity Board had invited bids for short 
,gestation power projects. M/s. LANCO also submitted its bid 
F which was accepted by the Board and approved by the 
Government of Andhra Pradesh leading to a Power Purchase
Agreement (for brevity, 'PPA') dated 31.3.1997. M/s. LANCO 
then set up a 355 MW (ISO) Combined Cycle Gas Power Plant. 
The completion of the plant took more than the scheduled 
G period of 16 months. It is not necessary to go into reasons for 
the delay in the present proceeding. It will suffice to note that 
Mis. LA NCO declared 25.10.2000 as the date of 
commissioning of their project but this was not accepted as 
the Commercial Operation Date (COD) by APTRANSCO. 
H However, M/s. LANCO continued to generate power and
A.P. POWER COORDINATION COMMITTEE v. LANGO 
461 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
delivered it to grid. It raised bills from 19.9.2000. While the A 
charges for the energy delivered were accepted, the bill for 
capacity charges was disallowed on the ground that it was not 
in accordance with the PPA. On 8.9.2003 M/s. LANCO issued 
a notice of arbitration under Article 14 of the PPA. There is 
some dispute as to whether this notice was only for invoking B 
the mechanism for informal dispute resolution or also a notice 
for resolution of dispute by Arbitration. The appellants through 
a reply dated 24.9.2003 requested for an ordinary meeting to. 
discuss pending problems before considering the request for 
arbitration. On 14.10.2003 Mis. LANCO wrote a letter C 
intimating the nomination of its Company's Secretary as its 
representative to participate in the proceeding for informal 
dispute resolution required by Article 14.1. It requested the 
other side to designate their representative and to intimate 0 
the date and venue of the meeting. The appellants through a 
letter dated 25.11.2003 designated their Chief General 
Manager to act as their representative but the meeting 
scheduled could not take place. On 26.3.2004, M/s. LANCO 
issued another notice for arbitration and intimated the name E 
of Justice B.P. Jeevan Reddy as its arbitrator. Through a letter 
dated 8.4.2004, APTRANSCO raised various grounds in 
support of its stance that the arbitration clause
was not 
enforceable, particularly in the light of Section 86(1 )(f) of the 
Electricity Act, 2003. 
F 
5. M/s. LANCO did not accept the stand of appellants 
arid filed an Arbitration Application bearing No.31 of 2004 on 
27.4.2004 before the High Court of Andhra Pradesh at 
Hyderabad under Section 11(4) of the Arbitration and G 
Conciliation Act, 1996 seeking appointment of arbitrator for 
APTRANSCO so that the disputes raised by it could be 
resolved through arbitration. APTRANSCO contested the 
maintainability of arbitration proceedings on various grounds 
including Section 86(1 )(f) of the Electricity Act, 2003. While H
462 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A the matter before the High Court was still pending, the scope 
and effect of Section 86( 1 )(f) of the Electricity Act was decided 
by a judgment of this Court dated March 13, 2008 in the case 
of Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. 
(2008) 4 SCC 755. This Court held that all disputes between 
B the licencee such as the appellants and generating companies 
such as Mis. LANGO require adjudication only by the State 
Commission which is alone competent to either adjudicate 
the disputes or refer them for arbitration and to appoint 
arbitrator. It was clearly held that it is the State Commis~ion or 
C its nominee under Section 86(1 )(f) of the Electricity Act, 2003 
and not the Chief Justice cir his nominee under Section 11 of 
the Arbitration and Conciliation Act, 1996 who will have the 
authority to appoint an arbitrator if it decides to refer the 
0 
disputes to arbitration. This Court further clarified that except 
the power of appointing arbitrator getting shifted to the State 
Commission, conduct of arbitration even under Section 86(1 )(f) 
of the Electricity Act would be governed by provisions of the 
Arbitration and Conciliation Act, 1996. Only in cases of conflict 
E the Electricity Act would prevail. 
6. In view of law settled by the judgment in the case of 
Gujarat Urja (supra), the Arbitration Application No.31 of 2004 
was closed by the High Court on 18.3.2009 with liberty to M/s. 
F LANCO to approach the
Commission under Section 86(1 )(f) 
of the Elec~ricity Act. M/s. LANCO filed O.P.No.33 of 2009 
before the Commission on 5.6.2009 to claim capacity charges 
on the basis of bills raised from 15.9.2000 onwards to 
11.1.2001. The appellants resisted the claim inter a/ia on the 
G ground of limitation. The appellants preferred a specific 
application for rejecting the O.P.No.33 of 2009 on the ground 
of limitation. M/s. LANCO preferred a reply in which Section 
14 of the Limitation Act was invoked for seeking exclusion of 
time when the arbitration proceeding had remained pending 
H with the High Court in the form of Arbitration Application No.31
A.P. POWER CCORDINATION COMMITTEE v. LANGO 
463 
KONDAPALLI POWER LTD. [SHIVA KIRTI SINGH, J.] 
of 2004. The Commission rejected the claim by order dated A 
13.6.2011 on the ground of limitation by holding that the time. 
spent in the arbitration proceedings did not merit exclusion 
under Section 14 of the Limitation Act because it had not been 
pursued in good faith. M/s. LAN CO preferred Appeal No.129 
of 2011 before APTEL. That appeal was allowed by the B 
impugned judgment presently under appeal, dated 2.7.2012. 
APTEL reversed the findings of the Commission on the issue 
of limitation and directed the Commission to pass appropriate 
follow up order on the actual claims and interest. 
c 
7. So far as claim of M/s. LAN CO for reimbursement of 
MAT for various periods is concerned, the claim for the period 
2001-2005 was rejected by the Commission on the ground of 
limitation but it got revived on account of common appellate 
order by APTEL dated 2.7.2012 and after the remand only a D 
consequential order is required to be passed by the 
Commission. For other periods, the claim for reimbursement 
of MAT has been allowed in favour of M/s. LANCO. The 
Commission allowed the claim for the periods 2006-2009 and 
2009-2012 on account of its earlier order in respect of similar E 
claim in another case which elicited a concession by the 
counsel for the appellants, although in the written statement 
before the Commission the appellants had seriously contested 
such claim on
merits. It is contended by Mr. V. Giri, learned 
F 
senior counsel for the appellant that the concession was 
misconceived and unauthorized. Learned senior counsel for 
M/s. LANCO, Mr. Sundaram, fairly conceded that the issue 
relating to claim for reimbursement of MAT may be heard and 
decided by us on merits and accordingly the parties have been G 
heard in detail on the merits of such claim for the entire period,. 
i.e., from 2001to2012. But in case the claim of MATfor2001-
2005 is held by us to be barred by limitation, it will not be 
considered on merits. 
H
464 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
8. Appearing for the appellants, learned senior advocate 
Mr. V. Giri pointed out that in the impugned on;ler under appeal 
APTEL has not considered the claim of capacity charges on 
merits and therefore this Court is not required to go into facts 
for deciding the merits of bills for capacity charges. On the 
B issue of limitation he contended that there was no issue raised 
before the Commission that bar of limitation as per Limitation 
Act is not applicable to the proceedings before the 
Commission. He referred to the arguments advanced on 
behalf of Mis. LAN CO before APT EL to highlight that even in . 
C appeal it claimed exclusion of time spent in arbitration 
proceedings under Section 14(2) of the Limitation Act and 
hence this Court should not allow Mis. LANCO to now urge 
that the Limitation Act cannot apply and hence there will be no 
0 bar of any limitation in preferring a claim before the State 
Commission. We have noticed that in para 28 of the judgment 
under appeal APTEL has noted that the appellant no.1 (M/s. 
LANCO) does not seriously dispute the fact that the Limitation 
Act would be applicable to the present case. But learned 
E counsels have conceded that the issue whether Limitation Act 
is applicable or not is one of law and accordingly the parties 
have advanced detailed submissions on this issue. Hence 
we propose to consider these submissions also. 
F 
9. From the above stand of the parties, the
following 
issues emerge for our consideration and adjudication :-
G 
H 
(i) Whether the Limitation Act, 1963, particularly Section 
3 and the Schedule will apply to any action instituted 
before the Commission under Section 86(1)(f) of the 
Electricity Act, 2003? 
(ii) Whether the impugned order passed by APTEL 
permitting application of principles emerging from 
Section 14 of the Limitation Act, is against Law so as to 
warrant interference?
AP. POWER COORDINATION COMMITTEE v. LANCO 
465 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
(iii) And whether on merits the claim for reimbursement A 
of MAT is in contravention of relevant terms and 
conditions of the Power Purchase Agreement (PPA)? 
10. At this juncture, relevant provisions or articles of PPA 
need to be noticed. They are as follows: 
B 
"Article 3.8 - Claims for Taxes on Income 
Any advance Income tax payable for the Project in any 
month supported by a certificate of a chartered 
accountant approved by the Board (such approval not to C 
be unreasonably withheld or delayed) shall be 
reimbursed by the Board. After the tax assessment is 
completed for any year: and the liability thereon is 
determined by the taxation authorities in India, the excess 0 
or shortfall in the tax liability so determined will be 
adjusted in the supplementary bill (as defined in Article 
5.5) for the succeeding month or on the due date of 
paymentthereof, whichever is later, subject to Article 3.9. 
Tax to be reimbursed will be calculated on the income E 
from the project only, and calculated on the assumption 
that the Company is engaged solely in the ownership, 
design, financing, construction, operation and 
maintenance of the Project and will not include tax 
reimbursements of the previous year. 
F 
5.5. 
- Supplementary Bills 
For payments due to the Company for reimbursement of 
taxes on income, incentives or taxes and duties levied 
on generation and/or sale of
electricity, payments for G 
periods of political Force Majeure affecting either Party 
or Non-Political Force Majeure affecting tile Board or 
any other adjustments or payments due to the Company 
hereunder, the Company shall present a supplementary H
466 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
bill, in such form as may be mutually agreed upon by the 
Board and the Company, (duly supported by supporting 
data). Each supplementary bill shall be payable by the 
Board on the Due Date of Payment, except in case of 
supplementary bill for taxes on income. At least thirty 
(30) days prior to the date when income tax is required 
to be paid by the Company, the Company shall submit to 
the Board a supplementary bill for the same. This bill 
shall be payable by the Board within twenty-five (25) days 
of its presentation to the Board by the Company or at 
least five (5) days before the date on which the tax is 
required to be paid by the Company, whichever is later. 
5.7 
- Billing Disputes 
Notwithstanding any dispute as to all or any portion of 
any bill submitted by the company to the Board, the Board 
shall pay the full amount of the bill provided that the amount 
of the bill is based on (a) a meter reading that has either 
been signed by both Parties or certified by the Company 
with respect to the Board's refusal to sign within three 
(3) days of the meter reading date and (b) the provisions 
of this Agreement. The Board shall notify the Company 
of any disputed alllount, and the Company shall rectify 
the defect or otherwise notify its rejection of the disputed 
amount, with reasons, within five (5) days of the reference 
by the Board, falling agreement on which the provisions 
of Article 14 shall
apply with respect thereto. If the 
resolution of any dispute requires the Company to 
reimburse the Board, the amount to be reimbursed shall 
bear interest at the Working Capital Rate applicable to 
the Board from the date of payment by the Board to the 
date of reimbursement. The Board may not dispute any 
amount after sixty (60) days following the Due Date of 
Payment therefor.
A.P. POWER COORDINATION COMMITTEE v. LANGO 
467 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
11.1 
- Definition of Law 
A 
For the purposes of this Agreement, "Law" means the 
constitution of India and any act, rul~, regulation, directive, 
notification, order or instruction having the force of Law 
enacted or issued by any competent legislature, or 8 
Government Agency. 
11.2 
- Definition of Change in Law 
For the purposes of this agreement, "Change in Law" 
means 
(i) any enactment or issue of any new Law, 
c 
(ii) any amendment, alteration, modification or repeal of 
any existing Law or any new or modified directive or 
order thereunder, 
D 
(iii) any change in the application or interpretation of any 
Law by a competent legislature or GovernmentAgency 
in India which is contrary to the existing accepted 
application or interpretation thereof, in each case coming 
E 
into effect after the date of this Agreement, provision for 
which has not been made elsewhere in the Agreement. 
11.4 - Additional/Reduced Expenditures or Other 
Increased/Reduced Costs due to a Change in Law F 
or Change in Permits 
(a) Within sixty (60) days after the COD of the first 
Generating Unit or the end of any Tariff Year, the Company 
shall determine after accounting for the net economic G 
effects on the Company during the period prior to the 
COD of the first Generating Unit or, as the case may be, 
such Tariff Year of any Changes in Law or Cha.nges in 
Permits, based on an accounting
conducted by an 
independent chartered accountant reasonably H
468 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
acceptable to the Board. If as a result of such accounting, 
the company suffers an increase in costs or a reduction 
in after-tax cash flow or any other net economic burden 
which it would not nave experienced but for such changes 
in Law or Changes in Permits (taking into account the 
reasonable costs offinancing of any capital improvement 
in the period prior to the COD of the first Generating Unit 
or, as the case may be, such Tariff Year), the aggregate 
economic affect of which exceeds the equivalent of 
Rupees three (3) crores per 100 MW or pro-rata for any 
part thereof during the period prior to the COD of the 
first generating unit and Rupees one ( 1) crore per 100 
MW or pro-rata for any part thereof during the period after 
the COD of the first Generating Unit, during any Tariff 
Year (excluding cost adjustments in respect of Changes 
in Law or Changes in Permits from any prior period), the 
Company may notify the Board of any proposed 
amendments to this Agreement required to put the 
Company in the same economic position it would have 
occupied in the absence of such cost increase reduction 
in the net after-tax cash flow or any other economic 
burden. Such notice shall be accompanied by a 
certification of the Company's independent chartered 
accountant and a reasonably detailed explanation of 
certification of any officer of the Company respecting the 
basis for such net economic burden
increase. The 
amount of an net economic burden claimed by the 
Company shall be net of any insurance proceeds 
received in respect thereof. 
(b) Within sixty (60) days after the COD of the first 
Generating Unit or the end of any Tariff Year, if after 
accqunting as provided in subsection (a) for the net 
economic effects on the Company during the period prior 
to the COD of the first Generating Unit or as the case
A.P. POWER COORDINATION COMMITTEE v. LANCO 
469 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
may be, such tariff year of any changes in law or A 
Changes in Permits, the Company experiences a 
reduction in costs or an increase in after-tax cash flow or 
any other net economic benefit which it would not have 
experienced but for such Changes in Law or Changes in 
Permits, the aggregate economic effect of which B 
exceeds the equivalent of Rs.3 crore per 100 MW or pro-
rata for any part thereof during the period prior to the 
COD of the first Generating Unit or Rupees one (1) crore 
per 100 MW or pro-rata for any part thereof, following 
the COD of the first Generating Unit, during any tariff Year, C 
the Company shall provide to the Board results of such 
accounting together with a certificate of the Independent 
chartered accountant and the Board, in response thereto 
may notify the company of any proposed amendments D 
to this Agreement required in its good faith judgment to 
put the Company in the same economic position it would 
have occupied in the absence of such cost reduction, 
increase in the net after-tax cash flow or any other 
economic benefit. Such notice shall be accompanied E 
by a reasonably detailed explanation of a certification of 
·. an officer of the Company respecting the basis for such 
decrease. 
(c) Only increased costs which are necessarily and F 
unavoidably incurred in complying with or as a direct result 
of the Changes in Law or Changes in
Permits taking into 
account, all reasonable steps which may be taken by the 
Company to minimize such increased costs, shall be 
considered as increased costs for the purposes of this G 
Article. 
(d) As soon as practicable during the period prior to the 
COD of the first Generating Unit or any Tariff Year after 
the Company becomes aware of any Change in Law or H
470 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
Change in Permits which could reasonably be expected 
to give rise to an increase/reduction in costs or reduction/ 
increase in after-tax cash flow pursuant to paragraph (a) 
and (b), the Company shall provide an interim notice 
thereof to the Board describing, to the extent possible, 
the expected effect on the costs and the cash flow of the 
Company. The Company shall consult with the Board 
regarding such increased expenditures and the 
Company shall use all reasonable efforts to implement 
the Board's recommendations, if any, to minimize such 
increased expenditures consistent with Prudent Utility 
Practices and the Company's obligations under this 
Agreement. If prior to the end of any Tariff year the 
Company demonstrates on the basis of a certification of 
its chartered accountant that any Change in Law or 
Change in Permits would result in the Company's being 
unable to meet its payment obligations to its lenders under 
the Financing Documents on a current basis, then in 
addition to the Company's right under sub-section (a) 
but notwithstanding the time period for exercising such 
rights specified therein, the Company shall be entitled to 
propose amendments to this Agreement as provided in 
sub-section(a) and the Parties shall consider such 
proposal as provided in subsection (e) below, provided 
that any benefits which the Company is eligible to receive 
under subsection (a) shall be reduced by
any benefits 
received by the Company prior to the end of the relevant 
period under this subsection. 
(e) Within thirty (30) days after receiving any proposal 
pursuant to paragraph (a), (b) or (d), the Parties shall 
meet and agree on either amendments to this Agreement 
or alternative arrangements to implement the foregoing. 
If no such agreement has been reached within ninety (90) 
days after any meeting pursuant to Article 11.3(a), (b) or
A.P. POWER COORDINATION COMMiTTEE v. LANGO 
471 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
(d), as the case may be, the proposals of the Parties A 
. shall be submitted to the Independent chartered 
accountant referred to in paragraphs (a), (b) and (d), as 
the case may be. 
14.1 
- Informal Dispute Resolution 
(a) Each Party shall designate in writing to the other Party 
a representative who shall be authorized to resolve any 
dispute arising under this Agreement in an equitable 
manner. 
(b) If the designated representatives are unable to resolve 
a dispute under this Agreement within fifteen (15) days, 
such dispute shall be referred by such representatives 
B 
c 
to a senior officer designated by the Company and a 0 
senior officer designated by the Board, respectively, who 
shall attempt to resolve the dispute within a further period 
of fifteen (15) days. 
(c) The Parties hereto agree to use their best efforts to 
attempt to resolve all disputes arising hereunder E 
promptly, equitably and in good faith, and further agree 
to provide each other with reasonable access during 
normal business hours to any and all non-privileged 
records, information and data pertaining to any such 
F 
dispute. 
14.2 
-Arbitration 
(a) In the event that any dispute is not resolved between 
the Parties pursuant to Article 14.1, then such disputes G 
shall be settled exclusively and finally by arbitration. It is 
specifically understood and agreed that any dispute that 
cannot be
resolved oetween the Parties, including any 
matter relating to the interpretation of this Agreement, 
shall be ·submitted to arbitration irrespective of the H
472 
A 
B 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
magnitude thereof, and the amount in dispute or whether 
such dispute would otherwise be considered justiciable 
or ripe for resolution by any court or arbitral tribunal. This 
Agreement and the rights and obligations of the Parties 
hereunder shall remain in full force and effect pending 
the award in such arbitration proceedings, which award 
shall determine whether and when termination of this 
Agreement if relevant shall become effective." 
11. Although, we were taken through various other 
C Articles of PPA but it is not imperative to reproduce all such 
provisions. Article 3.1 provides for capacity charge which is 
required to be computed as per Article 3.2 and is meant to be 
paid by the Board. This is in respect of the Cumulative 
Available Energy provided by the Project in respect of any tariff 
D year, upto (but not exceeding) an amount calculated on the 
basis of Prescribed Plant Load factor. Since the issue of 
capacity charge is not required to be addressed by us on 
merits, further details need not detain us. Clause 3.8 has 
been read over again and again because it is of immense 
E significance in deciding the issue relating to MAT. Article 5 
contains various sub-articles relating to billing and payment. 
They provide for monthly tariff bills which are payable by the 
Board or the licensee on the Due Date of Payment. The 
F supplementary bills are covered by Article 5.5. They cover 
different items and are
required to be supported by supporting 
data. Such bills are also payable on the Due Date of Payment, 
except the supplementary bill for taxes on income which is to 
be submitted at least 30 days prior to the time when the income 
G tax is required to be paid by the generating company. Such 
bill is payable by the Board within 25 days of presentation or 
at least 5 days before the date on which the tax is required to 
be paid by the company, whicheveJ is later. 
12. Article 5.7 relates to billing disputes and it refers to 
H the provisions of Article 14 which governs Arbitration including
A.P. POWER COORDINATION COMMITTEE v. LANCO 
473 
KONDAPALLI POWER LTD. [SHIVA KIRT! SINGH, J.) 
Informal Dispute Resolution. Article 11 caters to the effects of A 
Change in L~w 1Jpon the rights and liabilities of the parties. 
This has assumed relevance in the present context on account 
of stand taken by the appellant that MAT does not fall under 
Article 3.8 governing claims for Taxes on Income but under 
Article 11.4 which provides an altogether different procedure B 
for making claim for additional costs by the company on 
account of any Change in Law etc. In this contex· it may usefully 
be noted that Article 1 of PPA contains definitions fo.r the 
purposes of the agreement. Article 1.2 adopts definition of 
several terms as defined in the Indian Electricity (Supply Act) C 
1948 and set out in Schedule B to the Agreement. Article 1.4 
contains various general provisions such as - unless the context 
otherwise requires, the singular shall include plural etc. and 
vice versa and that " ....... a reference to any Law shall be 0 
construed as a reference to such Law as from time to time 
amended or re-enacted." 
13. Mr. Giri drew our attention to various provisions of 
the Electricity Act, 2003 particularly to Section 86 providing 
for various functions of a State Commissi·on which include the E 
function under clause (f) in Sub-Section (1) empowering the 
Commission fo "adjudicate upon the disputes between the 
licensees and generating companies and to refer any dispute
for arbitration." He also referred to Section 94 which vests the 
F 
Commission, for purposes of any inquiry or proceedings under 
this Act, with same powers as are vested in Civil Court under 
the Code of Civil Procedure, 1908 in respect of various matters 
such as summoning and enforcing the attendance of any 
person and examining him on oath; discovery and production G 
of any document etc; receiving evidence on affidavit; 
requisitioning of any public record; issuing commission forthe 
examination of witnesses; reviewing its decisions, directions 
and orders; and any other matter which may be prescribed by 
the Commission. The Commission shall also have powers to 
H
474 
SUPREME COURT REPORTS 
(2015] 12 S.C.R. 
A pass suitable interim order and authorize any suitable person 
to represent the interest of the consumers in the proceedings 
,before it. Section 95 declares that all proceedings before the 
Commission shall be deemed to be judicial proceedings within 
the meaning of Sections 193 and 228 of the Indian Penal Code 
B and it shall be deemed to be a Civil Court for the purposes of 
Sections 345 and 346 of the Code of Criminal Procedure, 
1973. Section 158 is a solitary provision in Part XVI which 
provides for arbitration under the heading "Dispute Resolution". 
According to Section 158, any matter directed to be 
C determined by Arbitration, unless there is expressed provision 
to the contrary in the license of a licensee, shall be determined 
by such person or persons as the Commission may nominate 
in that behalf on the application of either party; but in all other 
D respects the Arbitration shall be subject to the provisions of 
the Arbitration and Conciliation Act, 1996. 
14.0n the basis of powers and functions of the 
Commission highlighted above and on account of law declared 
in Gujarat Urja (supra) as well as in Tamil Nadu Generation 
E & Distribution Coipn. Ltd. v. PPN Power Generating Co. 
(P) Ltd., (2014) 11SCC53, the contention of Mr. Giri is that in 
discharge of its functions to adjudicate all disputes between 
the licensees and generating companies and/or in referring a 
F dispute to arbitration under Section 86(1
)(f) of the Electricity 
Act, the Commission deserves to be treated as a substitute 
and therefore equivalent of civil court for the purpose of 
attracting the bar of limitation provided under the Limitation 
Act, 1963. According to him the law laid down by this Court 
G that Limitation Act applies only to civil courts in the strict sense 
of the term requires reconsideration in an appropriate case 
but in the present matter, since in the case of PPN Power 
Generating Co. (P) Ltd.(supra) it has been categorically held 
that the State Commission discharges judicial functions and 
H judicial power of far reaching effect and has essential trapping
A.P. POWER COORDINATION COMMITTEE v. LANGO 
475 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
of the Courts, the same should be sufficient to make the A 
Limitation Act applicable to petitions or applications that come 
before the Commission requiring adjudication even of matters 
arising purely out of contract like in the present case and not 
from the statutory provisions of the Electricity Act. He also 
advanced a supplementary or alternative submission that there B 
is nothing in the Electricity Act, 2003 to restore to any party the 
right to sue for a cause which has already become barred by 
law of Limitation, rather under the mandate of Section 175 of 
the Electricity Act, the Limitation Act has to be given full respect 
as a law for the time being in force unless any provision of the C 
Limitation Act is found to be inconsistent with the Electricity 
Act. Only in a situation of conflict, the electricity Act will have a 
superior or overriding force by virtue of Section 174 of the 
Electricity Act. 
D 
15. Yet another submission of Mr. Giri is that the matter 
does not attract Section 2(4) oftheArbitration and Conciliation 
Act, 1996 (for brevity 'Arbitration Act') rather Section 43 of the 
Arbitration Act shall govern the rights of the parties and it 
mandates that the Limitation Act, 1963 shall apply to arbitrations· E 
as it applies to proceedings in courts. It may however be noted· 
here that in the case of PPN Power Generating Co. (P) Ltd. 
(supra) in para 65,
the Court held that the Limitation Act would 
not be applicable in such matters for various reasons including 
F 
Section 2(4) of the Arbitration Act which was extracted to 
highlight that sub-section (1) of Section 40, Sections 41 and 
43 all in Part I of the Arbitration Act, would not apply to arbitration 
under any other enactment. Only rest of the Limitation Act 
would be applicable to the extent not inconsistent with the other G 
enactment or any Rule made thereunder. On that basis in 
Paragraph 66 it was held that the provisions with regard to 
Limitation Act under Section 43 of the Arbitration Act would 
not be applicable to statutory arbitrations conducted under the 
Electricity Act, 2003. 
H
476 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
16. In fairness to the submission of Mr. Giri, it is noted 
that in the PPN Power Generating Co. (P) Ltd.(supra), in 
Paragraphs 64 and 68, this Court was satisfied on facts itself 
that the principle of delay and !aches was not attracted. Further, 
the provisions in the PPA in that case provided that the seat of 
B Arbitration shall be in London and that alone made part I of the 
Arbitration Act inapplicable to the arbitration proceeding and 
ruled out applicability of Section 43 also. 
17. Mr. Giri has placed considerable reliance upon a 
C jt,Jdgment by three Judges of this Court in State of Kera la v. 
V.R. Kalliyanikutty (1999) 3 SCC 657. The question of law 
in that case was whether a debt which is barred by the law of 
limitation can be recovered by resorting to recovery 
proceedings under the Kera la Revenue Recovery Act of 1968. 
D The High Court held that in the absence of any provision in the 
aforesaid Kerala Act creating a substantive right to recover 
time barred debts, such debts could not be recovered through 
the summary proceedings under that Act. As per Section 71 
of the Kerala Act the Government could issue a notification 
E making the provisions of the Act applicable to the recovery of 
"amounts due" from any person or class of persons to any 
specified institution or any class of institutions. The say of 
State Government and the State Financial Corporation was 
that the words "amounts due" will
encompass time barred claims 
F also. This Court placed reliance upon judgment of the Privy 
Council in the case of Hans Raj Gupta v. Dehra Dun-
Mussoorie Electric Tramway Co. Ltd. AIR 1933 PC 63. It 
found that the Kerala Act did not create any new right rather it 
G only provided a process for speedy recovery of moneys due. 
Therefore the person claiming recovery cannot claim amounts 
which are not legally recoverable nor can a defence of limitation 
available to a debtor in a suit or other legal proceeding be 
taken away under the provisions of the Kera la Act. The State 
H supported its stand by highlighting the settled legal principle
A.P. POWER COORDINATION COMMITTEE v. LANCO 
477 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
that the statute of limitation merely bars the remedy without A 
touching the right. But such submission did not cut any ice. 
·Relevant provisions of the KeralaAct led to a conclusion that · 
. although the necessity offiling a suit stood avoided, the claim 
which could be legally recovered was not enlarged. In para 16 
this Court concluded thus: 
B 
" ......... An Act must expressly provide for such 
·enlargement of claims which are legally recoverable, 
before it can be interpreted as extending to the recovery 
of those amounts which have ceased to be legally C 
recoverable on the date when recovery proceedings are 
undertaken ...... " 
In fact this Court looked to the scheme of the Kerala 
Act to come to a conclusion that "amounts due" are those o 
amounts which the creditor could have recovered had he filed 
a suit. 
18. It is noteworthy that besides drawing relevant 
inference from the provisions of the Kera la Act, in paragraph E 
11 the Court acted cautiously in interpreting the words 
"amounts due" in view of Article 14 of the Constitution. It 
expressed its views thus : 
" ..... Moreover, such a wide interpretation of "amounts F 
due" which destroys an important defence available to a 
debtor in a suit against him by the creditor, may attract. 
Article 14 against the Act. It would be ironic if an Act for 
speedy recovery is held as enabling a creditor who has 
delayed
recovery beyond the period of limitation to G 
recover such delayed claims." 
In para 12 the Court referred to and relied upon judgment 
in the case of New Delhi Municipal Committee v. Kalu 
Ram (1976) 3 SCC 407 wherein this Court had similarly H
478 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A interpreted Section 7 of the Public Premises (Eviction of 
Unauthorised Occupants) Act, 1958. The words "arrears of 
. rent payable" were given a limited meaning by holding thus: 
" ..... In the context of recoverY of arrears of rent under 
B 
Section 7, this Court said that if the recovery is barred 
by the law of limitation, it is difficult to hold that the Estate 
Officer could still insist thatthe said amount was payable. 
When a duty is cast on an authority to determine the 
arrears of rent the determination must be in accordance 
C 
with law. .... " 
(emphasis added) 
19. Mr. Giri referred to paragraphs 98 and 99 of the 
0 judgment in the case of Kihoto Hollohan v. Zachillhu 1992 
Supp. (2) SCC 651 to highlight the attributes of a "Court" and 
those of a Tribunal and also the relevant tests which led the 
court to hold that the Speaker while deciding certain disputes 
is a Tribunal. Similarly in the case of Thakur Jugal Kishore 
E Sinha v. Sitamarhi Central Co-operative Bank Ltd. 1967 
(3) SCR 163, this Court held that the Assistant Registrar of 
Co-operative Societies was a court within the meaning of the 
Contempt of Courts Act, 1952. This inference was based on 
the pronounced view that the subordination for the purpose of 
F Section 3 of the Contempt of Courts Act means judicial 
subordination under the constitutional provisions and not 
subordination under the usual hierarchy of courts as per Civil 
Procedure Code or
the Criminal Procedure Code. The next 
case in this series is that of Brajnandan Sinha v. Jyoti 
G Narain AIR 1956 SC 66. In this case it was found that the 
Commissioner appointed under the Public Servants (Inquiries) 
Act 1850 (Act 37 of 1850) is not a court within the meaning of 
the term under Section 3 of the Contempt of Courts Act. This 
view found favour largely because the Commissioner did not 
H have the legal capacity under that Act to deliver "definitive
A.P. POWER COORDINATION COMMITTEE v. LANGO 
479 
KONDAPALLI POWER LTD. [SHIVA KIRTI SINGH, J.) 
judgment". Mr. Giri has however sought to highlight paragraphs A 
14 to 18 of the judgment which deal with the essential attributes 
of a Tribunal so as to clothe it with the status of a court. Those 
paragraphs are as follows : 
"(14) The pronouncement of a definitive judgment is thus B 
considered the essential 'sine qua non' of a Court and 
unless and until a binding and authoritative judgment can 
be pronounced by a person or body of persons it cannot 
be predicated that he or they constitute a Court. 
( 15) The Privy Council in the case of 'Shell Co. of Australia 
v. Federal Commissioner of Taxation', 1931AC275 (A) 
thus defined 'Judicial Power' at p.295: 
c 
'Is this right? What is 'Judicial power'? Their 0 
Lordships are of opinion that one of the best definitions 
is that given by Griffith C.J. in - 'Huddart, Parker & 
Co. v. Moorehead', (1909) 8 CLR 330 at p.357 (B) 
where he says: 'I am of opinion that the words 'judicial 
power' as used in S.71 of the Constitution mean the 
E 
power which every sovereign authority must of 
necessity have to decide controversies between its· 
subjects, or between itself and its subjects, whether 
the rights relate to life, liberty or property. The exercise 
of this power does not begin until some tribunal which 
F 
has power to give a binding and authoritative decision 
(whether subject to appeal or not) is called upon to 
take action'.
Their Lordships further enumerated at p.297 certain G 
negative propositions in relation to this subject: 
'1. A tribunal is not necessarily a Court in this strict 
sense because it gives a final decision; 
2. Nor because it hears witnesses on oath; 
H
480 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
3. Nor because two or more contending parties 
appear before it between whom it has to decide; 
B 
4. Nor because it gives decisions which affect the 
rights of subjects; 
5. Nor because there is an appeal to a Court; 
6. Nor because it is a body to which a matter is 
referred by another body. 
C 
See 'Rex v. Electricity Commissioners' 1924-1 KB 
171(C)' 
D 
E 
F 
G 
H 
and observed at page 298: 
'An administrative tribunal may act judicially, but still 
remain an administrative tribunal as distinguished from 
a Court, strictly so-called. Mere externals do not make 
a direction to an administrative officer by an ad hoc 
tribunal an exercise by a Court of judicial power.' 
( 16) The same principle was reiterated by this Court in -
'Bharat Bank Ltd. v. Employees of Bharat Bank Ltd.',AIR 
1950 SC 188 (D); and - 'Meqbool Hussain v. State of 
Bombay', AIR 1953 SC 325 (E), where the test of a 
judicial tribunal as laid down in a passage from - 'Cooper 
v. Willson', 1937-2 KB 309 (F) at p.340, was adopted by 
this Court: 
'A true judicial decision presupposes an existing 
dispute betyveen two or more parties, and then 
involves four requisites: - (1) The presentation (not 
necessarily orally) of their case by the parties to the 
dispute, (2) ifthe dispute between them is a question 
of fact, the ascertainment of the fact by means of 
evidence adduced by the parties to the dispute and
A.P. POWER COORDINATION COMMITTEE v. LANCO 
481 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
often with the assistance of argument by or on behalf A 
of the parties on the evidence; (3) if the dispute 
between them is a question of law, the submission of 
legal arguments by the parties; and (4) a decision 
which disposes of the whole matter by a finding upon 
the facts in dispute and an application of the law of B 
' 
. 
the land to the facts so found, including where required 
a ruling upon any disputed question of law'. 
(17) 'Maqbool Hussain's case (E)', above referred to, 
was followed by this Court in - 'S.A. Venkataraman v. 
C 
Union of India', AIR 1954 SC 375 (G), where a 
Constitution Bench of this Court also laid down that both 
finality and authoritativeness were the essential tests of 
a judicial pronouncement. 
(18) It is clear, therefore, that in· order to constitute a 
Court in the strict sense of the term, an essential condition 
D 
is that the Court should have, apart from having some of 
the trappings of a judicial tribunal, power to give a 
decision or a definitive judgment which has finality and 
E 
authoritativeness which are the essential tests of a 
judicial pronouncement." 
20. On behalf of appellants reliance was next placed upon 
case of P. Sarathy v. State Bank of India (2000) 5 SCC 
F 
355. A Bench of two Judges considered the scope of the word 
"Court" occurring in Section 14 of the Limitation Act and held 
that any authority or tribunal having
trappings of a court is 
covered because "Court" does not necessarily have to be a 
civil court. On such reasonings the appellate authority under G 
Section 41 of Tamil Nadu Shops and Establishments Act was 
held to be a court. One must notice here only that the judgment 
in the case of P. Sarathy (supra) has been considered in a 
recent judgment of this Court rendered by a Bench of two 
Judges in the case of M.P. Steel Corporation v. 
H
482 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
Commissioner of Central Excise (2015) 7 SCC 58. In this 
case it was held that although the Limitation Act including 
Section 14 thereof would not apply to appeals filed before a 
quasi-judicial tribunal such as the Collector (Appeals) 
mentioned in Section 128 of the Customs Act, 1962 but the 
B principles underlying Section 14 of the Limitation Act would 
nevertheless apply as they advance the cause of justice. The 
Court repelled the submission that Section 128 of the Customs 
Act excludes the application of the principles underlying 
Section 14 of the Limitation Act. In order to reach the 
C conclusion that only principles underlying Section 14 and not 
the very Section itself can apply to tribunals having attributes 
of Court, in M.P. Steel Corporation (supra) the Court 
analysed the precedents and the Limitation Act 1963. It 
0 
concluded that a quasi-judicial Tribunal will suffer Limitation 
Act only as per the statutory scheme under which it is created 
and functions. On the other hand, on its own the Limitation Act 
is applicable in respect of proceedings before courts proper, 
i.e., courts as understood in the strict sense of being part of 
E the Judicial Branch of the State. In support of this principle 
several judgments of this Court were noted such as a three-
Judge Bench judgment in Commissioner of Sales T~x v. 
Parson Tools and Plants (1975)4 SCC 22 in which reliance 
was placed upon Ujjam Bai v. State of U.P.
AIR 1962 SC 
F 
1621. For the same purpose reliance was also placed upon 
judgment in the case of Jagannath Prasad v. State of U.P. 
AIR 1963 SC 416. A contrary view taken by a two-Judge Bench 
in the case of Mukri Gopalan v. Cheppilat Puthanpurayil 
Aboobacker (1995) 5 SCC 5 was therefore held to be at 
G variance with at least five earlier binding judgments and also 
at odd with a lclter judgment in the case of Consolidated Engg. 
Enterprises v. Irrigation Deptt. (2008) 7 SCC 169. The latter 
judgment was considered in detail because the three-Judge 
Bench examined the provisions of the Arbitration and 
H Conciliation Act 1996 and held that provisions of Section 14
A.P. POWER COORDINATION COMMITTEE v. LANCO 
483 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
of the Limitation Act 1963 would be applicable to an A 
application under Section 34 of the 1996 Act filed before a 
Civil Court for setting aside an Arbitral Award. This view in 
Consolidated Engg.(supra) has been further clarified by 
Ravindran, J. (as he then was) in his separate but concurring 
judgment, particularly in paragraph 44. 
B 
21. In an attempt to shJwthatthe word "Court" has been 
interpreted differently in context of different statutes, Mr. Giri 
referred to the case of Trans Mediterranean Airways v. 
Universal Exports (2011) 10 SCC 316. In paragraphs 44 C 
and onwards a number of precedents were noticed as to the 
meaning and interpretation of the word "Court" and in paragraph 
57 it was held that the word "Court" in Rule 29 of the Second 
Schedule of the Carriage by Air Act 1972 has been borrowed 
from the Warsaw Convention and had not been used in the D 
strict sense as used in the procedural laws of this country. The 
word "Court" was, therefore, held to include the consumer 
forums. In para 58 it was. reiterated that in legislations like the 
Consumer Protection Act the word "Court" cannot be given a 
strict meaning. 
E 
22. In reply on this issue, learned senior advocate Mr. 
Sundaram took a frontal stand that Limitation Act does not 
apply to a proceeding before the Commission because it is 
not a court stricto-sensu. For this proposition he relied upon F
judgments in the case of PPN Power Generating Co. (P) 
Ltd. (supra) and M.P. Steel Corporation (supra). He however 
floated a suggestion that even when no period of limitation is 
app!icable for initiating action before the Commission, if this 
Court finds it nec~ssary and in the interest of justice, then a G 
reasonable period may be indicated by this Court for the 
aforesaid purpose. He hastened to add that such reasonable 
period can only be as an illustration and not as a fixed period. 
According to him, a reasonable illustrative period indicated H
484 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
by the court, in practical application, can vary from case to 
case as per facts of each case. He also contended that even 
if a definite limitation period is found to be attracted, in view of 
law laid down clearly in M.P. Steel Corporation (supra), the 
principles underling Section 14 will be applicable and the same 
B has been rightly applied by APTEL while rendering the 
impugned order under appeal. 
23. Mr. Sundaram referred to PPN Power Generating 
Co. (P) Ltd. (supra) and placed reliance upon a solitary 
C sentence at the end of paragraph 64 which reads thus : 
"In any event, the Limitation Act is inapplicable to 
proceeding before the State Commission." 
0 
He also placed reliance upon paragraph 65 which is as 
follows: 
E 
F 
G 
H 
"65. The submission of the appellant that the Limitation 
Act would be available in case the reference was to be 
made to arbitration, in our opinion, is also without merit. 
Firstly, the State Commission exercised its jurisdiction 
to decide the dispute itself. The matter was not referred 
to arbitration, therefore, the Limitation Act would not be 
applicable. Secondly, Section 43 of the Arbitration and 
Conciliation Act would not be applicable even if the 
matter was referred to arbitration by virtue of Section 2(4) 
of the Arbitration Act, 1996. Section 2(4) of the Arbitration 
Act reads as under: 
'2(4) This Part except sub-section (1) of Section 40, 
Sections 41 and 43 shall apply to
every arbitration 
under any other enactment for the time being in force, 
as if the arbitration were pursuant to an arbitration 
agreement and as if that other enactment were an 
arbitration agreement, except insofar as the
A.P. POWER COORDINATION COMMITTEE v .. LANCO 
485 
KONDAPALLI POWER LTD. [SHIVA KIRTI SINGH, J.] 
provisions of this Part are inconsistent with that other A 
enactment or with any rules made thereunder." 
24. Mr. Sundaram placed reliance upon judgment in the 
case of M.P. Steel Corporation (supra) to support his 
submission that Limitation Act applies only to courts stricto- s 
sensu and not to quasi-judicial tribunals. It may be noted here 
that the matter in M.P. Steel Corporation (supra) had arisen 
from proceedings under the Customs Act and hence in that 
case there was no occasion to consider the issue whether the 
Limitation Act is applicable to an action initiated before the C 
Commission by virtue of provisions of the Electricity Act, 2003. 
However, this judgment does help the respondents to an extent 
by holding that principles underlying Section 14 of the 
Limitation Act will be applicable even in matters filed before a 
quasi-judicial tribunal such as the Commission. But the moot D 
question remains to be answered -whether the bar of limitation 
is required to be respected by the Commission on the ground 
that there is no provision in the Electricity Act conferring 
additional rights upon a party moving the Commission for relief 
so as to claim even such reliefs which stand barr~d by limitation E 
before the Civil Court or even for-arbitral proceedings. The 
other ancillary issue required to _be answered is -whether by 
virtue of provisions of the Electrici~y Act
2003 the Limitation 
Act has been made applicable to an action before the F 
Commission by express provision or even by necessary 
intendment. 
. 25. Before answering the aforesaid two issues and then 
adverting to the question whether principles of Section 14 were 
rightly applied by APTEL (in case any period of limitation is G 
held to be attracted), it will be proper to note some relevant 
contentions advanced by learned senior advocate Mr. Jayant 
Bhushan who has appeared for some of the respondents. 
H
486 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
26. Mr. Bhushan pointed out that Commission is a 
creature of Statute and hence it cannot reject a claim on the 
ground of limitation unless limitation is found to be applicable 
by virtue of the provisions of the Electricity Act 2003. According 
to him if Limitation Act does not apply, courts cannot import 
B limitation and the exceptional cases where this Court has 
introduced principles of delay and !aches relate to proceedings 
before quasi-judicial tribunals which are vested with 
discretionary or suo motu jurisdiction like revisional power; the 
other exception being courts having extraordinary or equity 
C jurisdiction such as writ jurisdiction vested in the High Courts 
or the Supreme Court. In support of the limited and exceptional 
applicability of principles of delay and !aches as distinguished 
from limitation, Mr. Bhushan placed reliance upon an old 
0 judgment of Supreme Court of United States in the case of 
Henry Hauenstein v. John A. Lynham 100 U.S. 483 and 
also upon extracts from Halsbury's Laws of England and a 
judgment of Chancery Division in the case of Re. Jarvis 
(Deceased) Edge v. Jarvis (1958) 2 All.ER 336. Since the 
E principle noted above is well settled, the above authorities need 
not be discussed particularly when this Court has taken similar 
view in the case of Bombay Gas Co. Ltd. v. Gopal Shiva 
1964(3) SCR 709 and Hindustan Times Ltd. v. Union of 
India (1998) 2 SCC 242. In the latter case
the issue under 
F consideration was of delay in passing order levying damages 
under Employees Provident Funds and Miscellaneous 
Provisions Act, 1952. The Court distinguished long line of 
cases such as State of Gujarat v. Patil Raghav Natha (1969) 
2 SCC 187 and Ram Chand v. Union of India (1994) 1 SCC 
G 44 by pointing out that same principles will not apply to moneys 
withheld by a defaulter when he actually holds the money in 
Trust for the beneficiaries. Paragraph 19 of that judgment 
highlights that the concerned Statute does not contain any 
provision prescribing a period of limitation either for 
H assessment or recovery and although the moneys payable into
A.P. POWER COORDINATION COMMITTEE v. LANCO 
487 
KONDAPALLI POWER LTD. [SHIVA KIRTI SINGH, J.) 
the Fund are for the ultimate benefit of the employees but there A 
is no provision by which the employees can directly recover 
the due amounts. The power of recovery is vested in the 
statutory authorities to be exercised in the manner provided 
by the Statute and not by way of suit. 
27. Mr. Bhushan also referred to some judgments in 
support of the principle that Statute of limitation only bars a 
remedy through ordinary suit and not a remedy provided under 
a special Statute such as the Industrial Disputes Act which must 
B 
be given effect to on the basis of various provisions contained C 
therein. For this purpose he relied upon a Constitut'on Bench 
judgment in the case of Bombay Dyeing & Manufacturing 
Co. Ltd. v. The State of Bombay AIR 1958 SC 328. He 
sought to explain the Constitution Bench judgment in the case 
of M/s. Tilokchand and Motichand v. H.B. Munshi (1969) D 
1 sec 110 by pointing out that delay and laches were held to 
be applicable to a petition under.Article 32 of the Constitution 
of India for the reason that such jurisdiction was always 
recognized and held to be a discretionary one. 
E 
28. Coming back to the issues relating to limitation, in 
view of law noticed above and for the reasons noted in M.P. 
Steel Corporation (supra), we respectfully concur and hold 
that by itself the Limitation Act will not be applicable to the 
Commission under the
Indian Electricity Act 2003 as the F 
Commission is not a Court stricto sensu. Further stand of the 
respondents that the Commission being a statutory tribunal, 
cannot act beyond the four walls of the Electricity Act also does 
not brook any exception. In the case of PPN Power 
Generating Co. (P) Ltd. (supra) this Court examined the issue G 
of limitation in a very summary manner and without referring to 
the relevant provisions of the Electricity Act 2003, at the end of 
para 64 it was observed in a single sentence that the Limitation 
Act is inapplicable to proceeding before the State H
488 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A Commission. But in view of detailed discussion in the case of 
M.P. Steel Corporation (supra), we have held above that by 
itself the Limitation Act is inapplicable to proceeding or action 
brought before the State Commission. However, the Electricity 
Act 2003 requires a further scrutiny to find out whether by virtue 
B of Section 175 of the Electricity Act or otherwise it can be 
inferred that the provisions of Limitation Act will govern or curtail 
the powers of the Commission in entertaining a claim under 
Section 86(1 )(f) of the Electricity Act. Section 175 reads thus: 
C 
"175. Provisions. of this Act to be in addition to and 
not in derogation of other laws. - The provisions of 
this Act are in addition to and not in derogation of any 
other law for the time being in force." 
o 
A plain reading of this Section leads to a conclusion 
that unless the provisions of the Electricity Act are in conflict 
with any other law when this Act will have overriding effect as 
per Section 17 4, the provisions of Electricity Act will not 
adversely affect any other law for the time being in force. In 
E other words, as stated in the Section the provisions of the 
Electricity Act will be additional provisions without adversely 
affecting or substracting anything from any other law which may 
be in force. Such provision cannot be stretched to infer 
adoption of the Limitation Act for the purpose of regulating the 
F varied and numerous
powers and functions of authorities under 
Electricity Act 2003. In this context it is relevant to keep in view 
that the State Commission or the Central Commission have 
been entrusted with large number of diverse functions, many 
being administrative or regulatory and such powers do not invite 
G the rigours of the Limitation Act. Only for controlling the quasi 
judicial functions of the Commission under Section 86(1 )(f), it 
will not be possible to accept the contention of the appellant 
that by Section 175 the Electricity Act, 2003 adopts the 
H Limitation Act either explicitly or by necessary implication.
A.P. POWER COORDINATION COMMITTEE v. LANCO 
489 
KONDAPALLI POWER LTD. [SHIVA KIRT! SINGH, J.] 
29. The only other weighty contention of Mr. Giri that there A 
is nothing in the Electricity Act 2003 to create a right in a suitor 
before the Commission to seek claims which are barred by 
law of limitation merits a serious consideration. There is no 
possibility of any difference of opinion in accepting that on 
account of judgment of this Court in Gujarat Urja (supra) the B 
Commission has been elevated to the status of a substitute 
for the Civil Court in respect of all disputes b.etween the 
licencees and generating companies. Such dispute need hot 
arise from the exercise of powers under the Electricity Act. 
Even claims or disputes arising purely out of contract like in C 
the present case have to be either adjudicated by the 
Commission or the Commission itself has the discretion to 
refer the dispute for arbitration after exercising its power to 
nominate the arbitrator. It is in view of such far reaching judicial 0 
powers vested in the Commission that in the case of PPN 
Power Generating Co. (P) Ltd. (supra) this Court advised 
the State to exercise enabling power under Section 84(2) to 
appoint a person who is/has been a Judge of a High Court as 
Chairperson of the State Commission. In such a situation it E 
falls for consideration whether the principle of law enunciated 
in State of Kerala v. V.R. Kalliyanikutty (supra) and in the 
case of New Delhi Municipal
Committee v. 
Kalu Ram 
(supra) is attracted so as to bar entertainment of claims which 
are legally not recoverable in a ~uit or other legal proceeding 
F 
on account of bar created by the Limitation Act. On behalf of · 
respondents those judgments were explained by pointing out 
that in the first case the peculiar words in the statute- "amount 
due" and in the second case "arrears of rent payable" fell for 
interpretation in the context of powers of concerned tribunal G 
and on account of aforesaid particular words of the statute 
this Court held that the duty cast upon the authority to determine 
what is recoverable or payable implies a duty to determine 
such claims in accordance with law. In our considered view a 
statutory authority like the Commission is also required to 
H
490 
SUPREME COURT REPORTS 
[2015) 12 S.C.R. 
A determine or decide a claim or dispute either by itself or by 
referring it to arbitration only in accordance with law and thus 
Section 17 4 and 175 of the Electricity Act assume relevance. 
Since no separate limitation has been prescribed for exercise 
of power under Section 86(1 )f) nor this adjudicatory power of 
B the Commission has been enlarged to entertain even the time 
barred claims, there is no conflict between the provisions of 
the Electricity Act and Limitation Act to attract the provisions 
of Section 174 of the Electricity Act. In such a situation on 
account of provisions in Section 175 of the Electricity Act or 
C even otherwise the power of adjudication and determination 
or even the power of deciding whether a case requires 
reference to arbitration must be exercised in a fair manner 
and in accordance with law. In the absence of any provision in 
D the Electricity Act creating a new right upon a claimant to claim 
even monies barred by law of limitation, or taking away a right 
of the other side to take a lawful defence of limitation, we are 
persuaded to hold that in the light of nature of judicial power 
conferred on the Commission, claims coming for adjudication 
E before it cannot be entertained or allowed if it is found legally 
not reco'1erable in a regular suit or any other regular proceeding 
such as arbitration, on account of law of limitation. We have 
taken this view not only because it appears
to be more just but 
also because unlike Labour laws and Industrial Disputes Act, 
F the Electricity Act has no peculiar philosophy or inherent 
underlying reasons requiring adherence to a contrary view. 
30. We have taken the aforesaid view to avoid injustice 
as well as possibility of discrimination. We have already. 
G extracted a part of paragraph 11 of the judgment in the case of 
State of Kerala v. V.R. Kalliyanikutty (supra) wherein Court 
considered the matter also in the light of Article 14 of the 
Constitution. In that case the possibility of Article 14 being 
attracted against the statute was highlighted to justify a 
H particular interpretation as already noted. It was also observed
A.P. POWER COORDINATION COMMITTEE l LANCO 
491 
KONDAPALLI POWER LTD. [SHIVA KIRTI SINGH, J.) 
that it would be ironic if in the name of speedy recovery A 
contemplated by the statute, a creditor is enabled to recover 
. claims beyond the period of limitation. In this context, it would 
be fair to infer that the special adjudicatory role envisaged 
under Section 86(1 )(f) also appears to be for speedy resolution 
so that a vital developmental factor - electricity and its supply B 
is not adversely affected by delay in adjudication of even 
ordinary civil disputes by the Civil Court. Evidently, in absence 
of any reason or justification the legislature did not contemplate 
to enable a creditor who has allowed the period of limitation to 
set in, to recover such delayed claims through the Commission. 
C 
Hence we hold that a claim coming before the Commission· 
cannot be entertained or allowed if it is barred by limitation 
prescribed for an ordinary suit before the civil court. But in 
appropriate case, a specified period may be excluded on 0 
account of principle underlying salutary provisions like Section 
5 or 14 of the Limitation Act. We must hasten to add here that 
such limitation upon the Commission on account of this 
decision would be only in respect of its judicial power under 
clause (f) of sub-section,(1) of Section 86 of the Electricity Act, 
E 
2003 and not in respect of its other powers or functions which 
may be administrative or regulatory. 
31. In the light
of above there can be no difficulty in 
appreciating that M/s. LANGO rightly appreciated the hurdle F 
of limitation in its way when such an objection was taken by 
the appellant and it rightly chose to seek exclusion of the period 
it was pursuing arbitration proceeding before the High Court, 
on the basis of principles underlying Section 14 of the 
Limitation Act. 
G 
32. The issue as to whether the impugned order by 
APTEL permitting application of principles on Section 14 of 
the Limitation Act is in accordance with law or warrants 
interference now requires to be answered on the basis of law H
492 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A as well as facts. In law, the APTEL could grant exclusion of 
certain period on the basis of principles under Section 14 in 
view of law laid down or clarified in M.P. Steel Corporation 
(supra). On facts, although the parties have argued at length, 
we find no difficulty in holding thatAPTEL has adopted a just 
B and lawful approach in examining the relevant facts and in 
excluding the entire period claimed by Mis. LAN CO which starts 
from the notice for arbitration dated 8.9.2003 given by Mis. 
LANGO, till the application of Mis. LANGO under Section 11 
of the Arbitration Act before the High Court was finally disposed 
C of on 18.3.2009. The issue whether the first notice dated 
8. 9.2003 or the next notice dated 26.3.2004 should be treated · 
as notice for arbitration for the purpose of Section 21 of the 
Arbitration Act was rightly not pursued further by Mr. Giri after 
0 some initial arguments. But since this issue was touched, we 
have looked at the entire Article 14 of the PPA as well as the 
notice dated 8.9.2003 and we find no difficulty in holding it as 
the notice for arbitration which amounted to initiation of arbitral 
proceedings as contemplated by Section 21 of the Arbitration 
E Act. A spirited argument was advanced on behalf of appellant 
that after the judgment of this Court in Gujarat Urja (supra) on 
13.3.2008, the continuance of the arbitral proceedings before 
the High Court at the instance of Mis. LANGO
should not be 
accepted as bona fide and that the commission was justified 
F in not excluding this period of about one year on the ground 
that it was not bona fide and in such facts APTEL should not 
have taken a contrary view. Having considered submissions 
of the parties we find no merit in the aforesaid contention 
advanced on behalf of appellant. The view which we are going 
G to take has been indicated by this Court in several judgments 
including M.P. Steel Corporation (supra). But the point 
requires no debate in view of clear stipulation in explanation 
(a) to sub-section (3) of Section 14 of the Limitation Act. This 
explanation reads as follows: 
H
A.P. POWER COORDINATION COMMITTEE v. LANGO 
493 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.) 
"Explanation- For the purposes of this section, -
A 
(a) in excluding the time during which a former civil 
proceeding was pending, the day on which that 
proceeding was instituted and the day on which it ended 
shall both be counted ........... " 
B 
The same conclusion is inevitable even on other relevant 
facts. The· appellant had notice of the arbitral proceeding and 
after judgment in Gujarat Urja (supra), the appellant also took 
no steps to get the application under Section 11 listed and C 
disposed of earlier to 18.3.2009. The averments and the 
materials are not sufficient to establish the claim of the appellant 
that the proceeding ceased to be bona fide after 13.3.2008. 
As a consequence of aforesaid discussion, the challenge to 
impugned order in respect of views taken on the issue of o 
limitation in the light of principles of Section 14 of the Limitation 
Act fails. 
Issues relating to MAT 
33.The notice of Arbitration dated 8.9.2003, .inter alia, · E 
made a demand for reimbursement of ir1~ome tax payment 
made by M/s. LANCO, as per Article 3.8 of the PPA. -No doubt 
the claim on this head for the subsequent years was not and 
could not be in this notice but the difference between the parties F 
on the issue had already arisen. In the notice claims for 
advance income tax for the period 1.4.2001 to 15.6.2003 
amounting to Rs.13.14 crores were included under the
heading 
"General Nature of Claims" and under the heading "Relief 
Sought", Mis. LANGO claimed - "a declaration that the claimant G 
is entitled to reimbursement of advance income tax paid by 
the claimant". Under the same heading M/s. LAN CO mentioned 
that it reserves its rights to seek such other reliefs or amend/ 
supplement the reliefs in the Statement of Claim as it may deem 
appropriate whenever the same is filed before the Arbitral H
494 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A Tribunal. Thus the issue whether MAT is covered by article 
3.8 of the PPA was clearly covered by Arbitration notice. The 
filing of upto date claims through amendment or otherwise 
before theArbitral Tribunal could not happen for the obvious 
reason that application under Section 11 of the Arbitration Act 
B itself remained pending till 181h March, 2009 before the High 
Court and thereafter before the Commission. 
34. It has already been noted that the claim for 
reimbursement of MAT for the period 2001-2005 was rejected 
C · by the Commission on the ground of limitation and after 
impugned order by APTEL reversing such order, that claim 
stands remitted to the Commission for passing a 
consequential order. The claims for other periods have been 
allowed by the Commission. On account of our view indicated 
D earlier upholding the order of APTEL on the issue of limitation, 
the claim of MAT for 2001-2005 cannot be treated as barred 
by limitation. Thus the claim of MAT for entire concerned period 
that is from 2001-2012 will be covered by our decision on 
Merits of Claim relating to MAT. The argument of Mr. Giri that 
E MAT cannot be covered by the provisions in Article 3.8 of the 
PPA providing for claims for taxes on income because the 
appellant had not foreseen such eventuality in view of the then 
prevailing tax regime under which income from such power 
F projects stood exempted, is noticed only to be rejected. The
entire phraseology used in Article 3.8 of the PPA leaves no 
manner of doubt that parties were aware that tax regime keeps 
changing and therefore any advance income tax payable for 
the income from the project only had to be reimbursed by the 
G Board. As a successor of the Board the appellant cannot avoid 
the liability to reimburse advance income tax paid by the M/s. 
LANCO, on the ground that MAT was a new variety of tax 
concept introduced subsequently in which minimum tax 
became payable on the basis of mere book profits of even 
H power generating companies. The argument that such tax is
A.P. POWER COORDINATION COMMITTEE v. LANCO 
495 
KONDAPALLI POWER LTD. [SHIVAKIRTI SINGH, J.] 
not on income from the project and therefore, not covered by A 
Article 3.8 of the PPA is also found to be without any substance. 
35. The objective of levying MAT, as declared by the 
Income Tax Department is to bring into the tax net "Zero Tax 
Companies" which inspite of having earned substantial book B 
profits and having paid handsome dividends, do not pay any 
tax due to various tax concessions and incentives provided 
under the Income Tax Law. It is no body's case that in fact M/ 
s. LAN CO had not generated income from the project during 
the relevant years. The taxable income, of course, became C 
amenable to MAT on account of Section 115JB. The. 
Legislative changes in respect of MAT show that it came into 
force initially with effect from 1.4.1988 by introduction of 
Section 115J in the Income Tax Act, 1961 but this provision 
was amended to exempt power generating companies with 
D 
effect from 1.4.1989 and from 1.4.1991 MAT became 
inapplicable because of deletion of Section 11 SJ which was 
reintroduced with effect from 1.4.1997 by insertion of Section 
115JA. But it was not made applicable to power generating 
companies till 31.3.2001. However, Section 115JA was E 
withdrawn and Section 115JB was inserted with effect from 
1.4.2001 to make MAT applicable to all targeted corporate 
entities including power generating companies. The 
submission on behalf of the
appellant that Section 115JB is a 
F 
tax not on profit but of different character is based on 
misconception. No doubt this Section has a special provision 
for payment of tax by certain companies on the basis of its 
book profit which is deemed to be the total income of the. 
assessee and is subjected to income tax at a specified rate. 
G 
The provisions of Sections 115JA and 115JB have been also 
construed as a self-contained code in Ajanta Pharma Limited 
vs. CIT, 201 O (9) sec 455 and in several other judgments as 
stand alone sections. But that does not change the basic 
nature of the provision. It remains a provision under the Income H
496 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A Tax Act and what is levied is income tax on the assessment of 
income as per such a special provision. 
36. Article 1.4 of the PPA provides inter alia that reference 
to any 'Law' shall be construed as a reference to such Law as 
8 . from time to time amended or re-enacted. This general 
provision in our view is sufficient to take care of all the taxes 
on income under Article 3.8 of the PPA notwithstanding different 
rates of income tax or other changes which may be brought 
about in the Income Tax Act. This view commends itself to us 
c because such change in Law relating to Income Tax does not 
require any additional claim to be raised by the power 
generating companies. There is no specific amount - or rate 
which is to be reimbursed by the Board. Rather, the entire 
advance income tax payable requires reimbursement on 
D account of Article 3.8 of the PPA provided of course that the . 
accounts are maintained in the manner required by the 
Agreement so that tax is only on the basis of income from the 
project. No such dispute has been raised in the present case. 
E 
37. The claim of the appellant that liability of MAT is on 
account of change in Law and therefore required M/s. LANCO 
to adopt the procedure for making claims under Article 11.4 of 
the PPA does not appeal to us for the aforesaid reasons. The 
entire stipulation in Article 11.4 of the PPA is in respect of 
F additional or reduced expenditures or costs which
have not 
been catered for and arise later due to change in Law. The 
burden on account of income tax as per Article 3.9 of the PPA 
cannot be treated as additional or reduced burden because 
the entire actual advance income tax payable for the project is 
G required to be reimbursed by the Board. 
It is immaterial 
whether the income tax payable is high or low in any particular 
year. When there is already a special provision in respect of 
entire payable taxes on income under Article 3.8 of the PPA, 
that should have precedence over the general provisions in 
H Article 11.4 of the PPA.
A.P. POWER C00RDINATION COMMITTEE v. LANCO 
497 
KONDAPALLI POWER LTD. [SHIVA KIRT! SINGH, J.] 
38. We have also considered other relevant provisions A 
of the Income Tax su~h as definition of income, total income, 
tax and find that they do not help the case of the appellant in 
any manner. Section 2(43) defines 'Tax' to mean income tax 
chargeable under the provisions of Income Tax Act and 'Total 
Income' has been defined with reference to Section 5 which · B 
enlarges the scope of total income not only to income received 
or accrued but also deemed to be received or deemed to be. 
accrued in India (for a resident). Simply because the exemption 
earlier granted. to power generating companies has been 
withdrawn so as to subject them to income tax liability under a C 
special provision, cannot lead to any inference as suggested 
on behalf of the appellant that it is not an income tax but some 
other tax which is levied under Section 115JB of the Income 
Tax Act. Hence we hold the claim for MAT covered by Article 0 
3.8 of the PPAand payable as such when requisite conditions 
stand satisfied. 
39. In the final conclusion, we find no scope to interfere 
with the impugned order in these appeals. The appeals are 
dismissed but without any order as to costs. 
E 
Nidhi Jain 
Appeals dismissed.