Team 02 - Petitioner

TEAM CODE: 02
14TH UPES DR. PARAS DIWAN MEMORIAL INTERNATIONAL ENERGY LAW MOOT COURT
COMPETITION 2024
BEFORE THE HON’BLE SUPREME COURT OF VERIDONIA

FILED UNDER ARTICLE 32 OF THE CONSTITUTION OF VERIDONIA
IN THE MATTER BETWEEN:
PDPL…………………………………………………………………………………………….PETITIONER
VERSUS
REPUBLIC OF VERIDONIA…………………………………………………………………DEFENDANT
MEMORIAL FOR PETITIONER
1
TABLE OF CONTENTS
LIST OF ABBREVIATIONS .................................................................................................... 4

INDEX OF AUTHORITIES ...................................................................................................... 5
STATEMENT OF FACTS ......................................................................................................... 8
STATEMENT OF JURISDICTION ........................................................................................ 10
ISSUES RAISED ..................................................................................................................... 11
SUMMARY OF ARGUMENTS ............................................................................................. 12
ARGUMENTS ADVANCED .................................................................................................. 14
(I) THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO 10%
IS NOT LEGALLY VALID ACCORDANCE TO THE ELECTRICITY ACT, 2003 AND
THE POLICIES FRAMED THEREUNDER, AND IS ARBITRARY. ............................... 14
i. The reduction is not in compliance with the electricity and tariff laws of Veridonia.
14
ii. It is an abuse of the discretionary power by the government. ................................... 17
(II) APTEL WAS INCORRECT IN REJECTING PDPL’S CHALLENGE TO THE
TARIFF ORDER DATED 29.09.2009 ON THE ISSUE OF THE REDUCTION OF THE
ROE. 19
i) The reduction of RoE was not for public interest but for electoral appeasement. .... 19
ii) The reduction of RoE was against public policy. ...................................................... 21
(III) THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED UNLAWFULLY IN
DELAYING THE RELEASE OF THE SUBSIDY TO PDPL . ........................................... 22
i) Section 65 of the Electricity Act, 2003. .................................................................... 22
ii) Crucial to the financial health of PDPL. ................................................................... 24
(IV) PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE POWER
GENERATORS AND THEIR NON-PAYMENT IS JUSTIFIED DUE TO THE
CIRCUMSTANCES FACED BY THEM. ........................................................................... 25
i) The doctrine of promissory estoppel. ........................................................................ 25
ii) The doctrine of legitimate expectation. ..................................................................... 28
(V) THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST
REFLECTIVE TARIFF AND CREATION OF A REGULATORY ASSET IS NOT
LEGALLY VALID AS PER THE ELECTRICITY ACT, 2003 AND THE POLICIES
FRAMED THEREUNDER ................................................................................................. 29
i) The method and reasoning for creation of the Regulatory Asset was not legal. ....... 30
ii) The surcharge was not sufficient enough to recover the debt. .................................. 31
2
(VI) PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA FOR
EXPROPRIATION THROUGH A CONFISCATORY TARIFF. DPERC IS NOT
ALLOWED TO PLAY A ROLE IN THE ARBITRATION PROCESS .............................. 33
i) The occurrence of indirect expropriation. ................................................................. 33
ii) DPERC cannot be an independent arbitrator during the arbitration proceedings. .... 37
PRAYER .................................................................................................................................. 39
3
LIST OF ABBREVIATIONS
ABBREVIATION EXPANSION
GETS Global Energy Transformation Summit
PFP Progressive Front Party
PDPL PowerNet Dakshin Pvt. Ltd.
DPERC Dakshin Prant Electricity Regulatory
Commission
APTEL Appellate Tribunal for Electricity
VCERC Veridonian Central Electricity Regulatory
Commission
VTPL Veridonia Thermal Power Limited
RoE Return on Equity
DISCOM Distribution Company
ICA Indian Contract Act, 1872
Ors. Others
Pvt. Private
Ltd. Limited
v. Versus
No. Number
& and
% Percentage
ETCHR European Court of Human Rights
UNCITRAL United Nations Commission on International
Trade Law
ARR Average Revenue Requirement
BSES Bombay Suburban Electric Supply
CIT Commission of Income Tax
Hon’ble Honourable
Id. Immediately preceding
Corpn. Corporation
§ Section
4
INDEX OF AUTHORITIES
CASES PAGE NO.
Ashoka Smokeless Coal India (P) Ltd. v. Union of India, (2007) 2 SCC 28
640, 702.
Biecco Lawrie Ltd. v. State of W.B., (2009) 10 SCC 32,40. 28
BSES Rajdhani Power Ltd. v. Delhi Electricity Regulatory Commission, 30
(2023) 4 SCC 788,812.
Burlington Resources Inc. v. Republic of Equador, ICSID Case No. 35
ARB/08/5.
CIT v. Mahindra and Mahindra Ltd., (1983) 4 SCC 392, 402. 20
Delhi Electricity Regulatory Commission v. BSES Yamuna Power Ltd., 15
(2007) 3 SCC 33, 51.
D.K. Trivedi & Sons v. State of Gujarat, 1986 Supp SCC 20, 61. 18
Garg Acryclics Ltd. v. Union of India, 2022 SCC OnLine Del 1890. 26
Haryana Power Generation Corporation Limited Shakti Bhawan v. 15
Haryana Electricity Regulatory Commission, 2010 SCC OnLine APTEL
36.
Indian Oil Corpn. Ltd. v. Raja Transport (P) Ltd., (2009) 8 SCC 520, 529. 37
Indian Rly. Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 579, 591. 18
Kedarnath v. Gorie Mohamed, (1887) ILR 14CAL64. 26
Noida Power Company Limited v. Uttar Pradesh Electricity Regulatory 30,32

Commission, 2016 SCC OnLine APTEL 61.
Paschimanchal Vidyut Vitran Nigam Ltd. v. Adarsh Textiles, (2014) 16 23
SCC 212, 219.
Pope & Talbot, UNCITRAL (NAFTA), Interim Award (June 26, 2000). 35
Rajasthan State Electricity Board v. Mohan Lal, 1967 SCC OnLine SC 18 37
S.D. Bansal Iron and Steel Private Limited v. Madhya Pradesh Electricity 23
Regulatory Commission, 2019 SCC OnLine APTEL 23.
Sri C.K. Yarram Reddy and Ors vs. The State of Andhra Pradesh and Ors., 24
MANU/AP/0678/2021
Tamil Nadu Electricity Consumers' Association v. Tamil Nadu Electricity 32
Regulatory Commission, 2014 SCC OnLine APTEL 15.
5
Union of India v. Hindustan Development Corpn., (1993) 3 SCC 499, 540. 28
STATUTES PAGE NO.
The Constitution of India -
Electricity Act, 2003, No.36, Act of Parliament, 2003. ( India). -
Indian Contract Act, 1872, No.9, Act of Parliament, 1872. (India). -
OTHER AUTHORITIES PAGE NO.
European Court of Human Rights 36
National Tariff Policy, 2016 -
United Nations Commission on International Trade Law art. 6, ¶ 7. 37
Vienna Convention on the Law of Treaties, art. 27 36
ARTICLES AND WEBSITES PAGE NO.
Barkha Tandon, Abuse of Administrative Discretion— A Detailed Study, 17, 20
SCC Times (March 12, 2024, 08:27pm)
(https://www.scconline.com/blog/post/2022/06/24/abuse-of-
administrative-discretion-a-detailed-study/
Benedict Clements, Energy Subsidy Reform: Lessons And Implications, 21
IMF, 1 (2013).
Committee Report on Delayed Payment By Discoms To Gencos/Ipps, at 24
11, 11-14 (2019).
Jayanta Chakraborty, Doctrine of Legitimate Expectation-A 28
Comparative Study of UK, USA & India, 5.1 IJLPP 21 (2018).
Manabika Mandal, The critical role of state government revenue subsidy 25
in electricity supply, CFAERF,1 (2020).
MERRIAM WEBSTER, Force majeure Definition & Meaning - 30
Merriam-Webster( Last visited March 12, 2023).
Pascale Accaoui Lorfing, The Evolution and Current Status of the 35
Concept of Indirect Expropriation in Investment Treaties and Arbitration,
6.2 IJAL 98 (2018).
R. Rajesh Babu, Changing Trajectories of Investment Protection in India: 35
An Analysis of Compensation for Expropriation, 6 TLD 359 (2014).
6
Robert Hale, What Is a "Confiscatory" Rate?, 35 Columbia Law Review 33
1045 (1935).
Shreya Dave, The doctrine of promissory estoppel, Manupatra. 26
(Accessed: 11 March 2024, 09:25 pm.).
http://manupatra.com/roundup/376/Articles/The Doctrine of
Promissory.pdf
Swaminathan, Eclipsed by Orthodoxy: The Vanishing Point of 26, 27
Consideration and the Forgotten Ingenuity of the Indian Contract Act
1872,12,asjcl, 141 (2017).
WORLD BANK, INTRODUCTION (worldbank.org), (Last visited 30
March 12, 2023).
BOOKS PAGE NO.

Kirti Singh, Electricity Act and its Implementation in India in Energy Law -
and Policy in India 48, 49-52 (Sairam Bhat, 2016).
Economic Law Partners, Legal Issues in India's Energy Sector 18-23 -
(2018).
7
STATEMENT OF FACTS
In the year 2000, Progressive Front Party, a political party based in Republic of Veridonia
achieved historical success in the national election while simultaneously holding power in the
state of Dakshin Prant, a significant vote bank and stronghold of the political party. The
development of the electricity sector had emerged as a central agenda and against this backdrop
PFP prioritized the advancement of the electricity sector, which reflected a keen understanding
of its profound impact on economic growth and societal progress.
After coming to power, PFP through its Government, extended invitations to global energy
leaders and companies for a conference on 03.04.2000 titled the ‘Global Energy
Transformation Summit - 2000’(“GETS 2000”) to be hosted in Dakshin Prant. During this
conference, Roxxon, a global energy conglomerate headquartered in the United States of
Amazonia actively engaged with Veridonia’ s stakeholders prioritising the need for negotiating
a Bilateral Investment Treaty (“BIT”) between United States of Amazonia and Veridonia. After
months of intricate negotiations, diplomatic deliberations, and meticulous legal considerations,
the BIT between Veridonia and the United States of Amazonia was successfully executed and
signed on 1.06.2000 marking a significant milestone in the efforts to fundamentally rehaul the
electricity sector of Veridonia. On 01.04.2001, Roxxon and the Government of Dakshin Prant
came together to establish PowerNet Dakshin Pvt. Ltd. (“PDPL”) to undertake the Distribution
and Retail Supply of electricity in Dakshin Prant. The company was incorporated with Roxxon
holding a majority stake of 51% and the Government of Dakshin Prant as a significant partner
with 49% stake. In the backdrop of these changes, Government of Veridonia enacted a
comprehensive consolidated law called The Electricity Act, 2003 (“Electricity Act”), to
liberalize the electricity sector and to ensure that the Distribution and Supply of electricity was
conducted on commercial principles.
In the aftermath of these large-scale reforms and privatization measures, PFP once again
secured a mandate for another five years from 2005. During these four years, grappling with
increasing operational costs, there were judicious periodic increases in tariff. However, as the
term approached its end, in the imminent challenge of an impending election and the fear of
losing its vote bank, PFP took a strategic decisive step of assuring to provide free electricity.
On 1st April 2009, DPERC notified the Tariff Regulations of 2009, in which they represented
a significant departure from status quo reducing the Return of Equity previously set at 16% to
10%. Aggrieved with the actions of DPERC, PDPL filed Appeal No. 145 of 2009 titled ‘PDPL
v. DPERC’ before the Appellate Tribunal for Electricity (“APTEL”) challenging the Tariff
8
Order. On 6th October 2009 APTEL dismissed PDPL’s appeal on grounds of maintainability,
which was then challenged by PDPL before the Hon’ble Supreme Court of Veridonia, in Civil
Appeal No. 13 of 2010.
The energy policies and promise of free electricity earned PFP another tenure in Dakshin Prant
and they shifted their sights on the national elections to be held in the forthcoming month. In
order to demonstrate their commitment to addressing the everyday concerns of the populace,
PFP decided to introduce subsidies for consumers using less than 300 units of electricity. PDPL
found itself in uncharted waters, and the Electricity Act, explicitly mandated the release of
subsidies to Discoms in advance, which the Government of Dakshin Prant faced fiscal
challenges in disbursing which further exerted financial strain on PDPL. The delay in release
of subsidies and lack of increase in tariff exacerbated PDPL’s ability to fulfil its payment
commitments to electricity generators, resulting in a petition being filed before Veridonian
Central Electricity Regulatory Commission (VCERC) by Veridonia Thermal Power Ltd.
(“VTPL”) one of the largest electricity generators in the country. The VCERC held PDPL liable
for its non-payment and directed PDPL to make timely payments to VTPL. This was challenged
by PDPL before APTEL where their appeal was dismissed, and the Commission asserted that
compliance with regulatory determinations and adherence to contractual obligations were
paramount. This was further challenged by PDPL before the Hon’ble Supreme Court in Civil
Appeal No. 768 of 2014.
The convergence of non-cost reflective tariffs and subsidy delays formed a perfect storm,
giving rise to a substantial revenue gap for PDPL. To address this predicament DPERC
introduced the concept of Regulatory Asset – an amount duly recognized in the utility’s balance
sheet but with deferred recovery earmarked for future years. The DPERC’s resolution also
included a mechanism for a miniscule surcharge of 9% which was in contrast cost of funding
the revenue gap /Regulatory Asset through loans which was more than 15%. In response to the
multi-faceted challenges, PDPL decided to invoke the arbitration mechanism outlined in the
BIT and in a final attempt to protect itself from financial ruin, approached the Hon’ble Supreme
Court through a Writ Petition under Article 32 of the Constitution of Veridonia. The Writ
petition titled ‘PDPL v. Union of Veridonia & Ors. arrayed the Union of Veridonia, the
Government of Dakshin Prant, and the DPERC as other parties and prayed for Civil Appeal
Nos. 13 of 2010 and 768 of 2014 to be tagged along.
9
STATEMENT OF JURISDICTION
The Petitioner in Writ Petition (C) No. 619 of 2020 submits to the jurisdiction of the Hon’ble
Supreme Court of Veridonia under Article 32 of the Constitution of Veridonia impleading the
Union of Veridonia, the Government of Dakshin Prant, and the DPERC as Respondents.
IN THE SUPREME COURT OF VERIDONIA
THE PETITIONERS HUMBLY AND RESPECTFULLY SUBMIT TO THE

JURISDICTION OF THIS HONOURABLE COURT
10
ISSUES RAISED
1. WHETHER THE REDUCTION IN THE RATE OF RETURN ON EQUITY

(RoE) FROM 16% TO 10% BY THE DPERC IS LEGAL AND VALID AS
PER THE ELECTRICITY ACT, 2003 AND THE POLICIES FRAMED
THEREUNDER?
2. WHETHER THE APTEL WAS CORRECT IN REJECTING PDPL’S
CHALLENGE TO THE TARIFF ORDER DATED 29.09.2009 ON THE
ISSUE OF REDUCTION OF ROE?
3. WHETHER THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED
UNLAWFULLY IN DELAYING THE RELEASE OF SUBSIDY TO PDPL?
4. WHETHER PDPL IS GUILTY OF NON-PAYMENT OF DUES TO THE
POWER GENERATORS AND IF THIS NON-PAYMENT IS JUSTIFIED BY
THE CIRCUMSTANCES FACED BY PDPL?
5. WHETHER THE ACTIONS OF THE DPERC IN DETERMINING A NON-
COST REFLECTIVE TARIFF AND CREATION OF REGULATORY ASSET
IS LEGAL AND VALID AS PER THE ELECTRICITY ACT, 2003 AND THE
POLICIES FRAMED THEREUNDER?
6. WHETHER PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA
FOR THE ALLEGED EXPROPRIATION THROUGH A CONFISCATORY
TARIFF? IS DPERC ALLOWED TO PLAY A ROLE IN THE
ARBITRATION PROCESS?
11
SUMMARY OF ARGUMENTS
(I) THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO

10% IS NOT LEGALLY VALID ACCORDANCE TO THE ELECTRICITY ACT,
2003 AND THE POLICIES FRAMED THEREUNDER, AND IS ARBITRARY.
The Petitioner submits that the reduction of the Return of Equity (RoE) from 16% to
10% is not legal under the following grounds. (i) The reduction is not in compliance
with the electricity and tariff laws of Veridonia since it is not in compliance with Section
61 of the Electricity Act, 2003, clauses 4.2, 4.7 and 5.4 of the Dakshin Prant Electricity
Regulatory Commission and Clause 5.11 of the National Tariff Policy.
(ii) It is an abuse of discretionary power by the government provided to the them under
Section 61 and 62 of the Electricity Act, 2003 along with the policies provided under
the BIT and DPERC regulations.
TARIFF ORDER DATED 29.09.2009 ON THE ISSUE OF THE REDUCTION OF
THE ROE.
The Petitioner submits that the APTEL was incorrect in rejecting the PDPL’s challenge
to the Tariff Order dated 29.09.2009 on the issue of reduction of the ROE, on the
following grounds. (i) It was not for public interest but for electoral appeasement as a
sudden change was brough about, very close to the elections which went against the
tariff policies of DPERC but was in consonance with the populist electoral demands.
ii) It was against public policy as the action by the State Government went against the
policies the BIT, Electricity Act, 2003 and DPERC regulations and was harmful to the
electricity sector and the State of Dakshin Prant as a whole in the long run.
(III) THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED UNLAWFULLY IN
DELAYING THE RELEASE OF THE SUBSIDY TO PDPL .
The Petitioner submits that the government of Dakshin Prant has acted unlawfully in
releasing the subsidy to PDPL under the following grounds. (i) Section 65 of the
Electricity Act, 2003 which states that the State Government is required to grant the
subsidy to any tariff that is determined in accordance to Section 62. Therefore, it was a
legal prerogative of the government to release the subsidy. (ii) It was crucial to the
financial health of PDPL, it is inferred that it is a persistent practice by the government
to delay the release of the subsidy which has a huge detrimental effect on the financial
12
health of DISCOMS. It has also been proven that the reasoning of the government to
not being financially able to pay PDPL is not legally valid.
(IV) PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE POWER
CIRCUMSTANCES FACED BY THEM.
The Petitioner submits that PDPL is not guilty of non-payment of dues to the power
generators and is justified in its circumstances under the following grounds. (i) The
doctrine of promissory estoppel which states that when the conduct of one party induces
the other to believe and leads him to act in a certain way, the promisor is not allowed to
go back on his promise. It is an equitable doctrine, usually used against the actions of
the government. (ii) The doctrine of legitimate expectation which provides remedy to
an individual when there is any hindrance caused to them due to certain actions or
policy changes by the government, if they have a legal right to the same.

REFLECTIVE TARIFF AND CREATION OF A REGULATORY ASSET IS NOT
LEGALLY VALID AS PER THE ELECTRICITY ACT, 2003 AND THE
POLICIES FRAMED THEREUNDER .
The Petitioner submits that the actions of the DPERC in determining a non-cost
reflective tariff and creation of a Regulatory Asset is not legal and valid as per the
Electricity Act and its policies under the following grounds. (i) The method and
reasoning for creation of the Regulatory Asset was not legal. As it goes against Section
61(d) of the Electricity Act, 2003 and is debilitating towards the financial health of
DISCOMS.(ii) The surcharge of 9% was not sufficient enough to cover the revenue gap
of 15% which is faced by PDPL, thus they will not be able to recover their costs in a
reasonable time period.
ALLOWED TO PLAY A ROLE IN THE ARBITRATION PROCESS.
The Petitioner submits that indirect expropriation did occur in accordance to Clause 5.3
through a confiscatory tariff and therefore arbitration against Veridonia can be invoked
as the tariffs and RoE set by the government were non cost reflective and affected the
investments made by PDPL. The Petitioner also submits that the DPERC cannot play a
role in the arbitration process as it is a part of the State under Article 12 of the
Constitution of India and therefore cannot be allowed under Clause 10.1 of the BIT.
13
ARGUMENTS ADVANCED
THE PETITIONER MOST HUMBLY AND RESPECTFULLY SUBMITS:
(I) THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO

10% IS NOT LEGALLY VALID ACCORDANCE TO THE ELECTRICITY
ACT, 2003 AND THE POLICIES FRAMED THEREUNDER, AND IS
ARBITRARY.
The Petitioner submits that the reduction of the Return of Equity (RoE) from 16% to 10%
is not legal under the following grounds, (i) the reduction is not in compliance with the
electricity and tariff laws of Veridonia and (ii) it is an abuse of discretionary power by the
government
i. The reduction is not in compliance with the electricity and tariff laws of
Veridonia.
The Petitioner submits that the reduction in the ROE is not in compliance with the
electricity and tariff laws of Dakshin Prant in accordance with Section 61 of the Electricity
Act, 2003, clauses 4.2, 4.7 and 5.4 of the Dakshin Prant Electricity Regulatory Commission
and Clause 5.11 of the National Tariff Policy.
Section 61 of the Electricity Act states that the tariffs should be regulated in a manner which
encourages competition, economical use of resources, efficiency and optimum investments.
It also states that while the interests of the consumers should be safeguarded, the cost of
electricity should be recovered in a reasonable manner and that the tariff should reflect the
cost of supply of electricity.1
Clause 4.2 of the Dakshin Prant Electricity Regulatory Commission (DPERC) states that
tariffs should be regulated in a way that is based on reasonable assumptions of the financial
and operational parameters, while also providing incentives to the performance2. Clause
4.7 states that tariff should be determined while taking into consideration operational and
maintenance expenditures, along with distribution losses.3 Clause 5.4 states that the RoE
shall cover all financing costs.4
Clause 5.11 of the National Tariff Policy states that a balance needs to be maintained
between the interests of the consumers and the need for investment when taking into
1
Electricity Act, 2003, §61, No.36, Act of Parliament, 2003. (India).
2
Moot Proposition, Annexure 2,Para 4.2.
3
Id. Para 4.7,
4
Id. Para 5.4.
14
consideration the rate of return. It states that there should be attraction of investment and
growth of the sector. 5
These laws are also in accordance with the principle grounds on which the Bilateral
Investment Treaty (BIT) was signed between the Republic of Veridonia and the United
States of Amazonia. It was through this treaty that PDPL was formed in Dakshin Prant and
hence the investments and activities that have been undertaken by the company are also to
be in accordance with it. The BIT was said to provide robust protection for foreign
investments and create a secure environment for entities like Roxxon which were helping
bring about the energy transformation in the country6. The BIT also provided for protection
of investments against fundamental breach of due process7 and for investments to comply
with all the laws and policies of a party concerning the same8. The Electricity Act was also
brough about to encourage efficiency, competition, optimum investments and recovery of
the cost of electricity in a reasonable manner,9 this reduction in the RoE, causes hindrances
to all these policies
In Haryana Power Generation Corporation Limited Shakti Bhawan v. Haryana Electricity

Regulatory Commission10, it was held that the reduction in the return on equity was not
justified as it negated the other factors that led to the growth of the sector. The Court took
into consideration the other relaxation of norms and parameters that had been given by the
State Commission and stated that reduction in the rate of equity negates the potential
growth of the sector through the previous stated factors.
In Delhi Electricity Regulatory Commission v. BSES Yamuna Power Ltd 11., it was stated
that reduction in the rate of equity would go against the reforms and privatisation schemes
as they are essential aspects of it, and therefore it should not be reduced.
Therefore, it can be inferred that when Dakshin Prant was undergoing an extremely
magnanimous change towards privatisation in its electricity sector, with a huge burden of
it being undertaken by PDPL, it had to heavily rely on the principles and promises upon
which the company had started initially, for the security and the future of the Company.
5
National Tariff Policy, 2016, CLause 5.11.
6
Moot Proposition, Para 16.
7
Moot Proposition, Annexure 1, Para 3.1 (b).
8
Id. Para 8.1.
9
10
Haryana Power Generation Corporation Limited Shakti Bhawan v. Haryana Electricity Regulatory Commission,
2010 SCC OnLine APTEL 36.
11
Delhi Electricity Regulatory Commission v. BSES Yamuna Power Ltd., (2007) 3 SCC 33.
15
PDPL undertook huge operational costs to maintain the state-of-the-art technologies and
its quality standards that it had promised to bring to Dakshin Prant. 12
Therefore, the
appropriate tariff policy was required to ensure its growth, maintenance of reliable
electricity services and protection of its investments. The tariff policy that was provided to
them, led to huge distribution losses and did not cover their operation and maintenance
expenditures as had been reiterated in the laws before.
The reduction in the ROE can lead to hindrance in foreign investments, as they will take
this step by the government as deterrence towards their growth and investment. This action
by the government can lead foreign investors to anticipate discriminatory practices and
unclear regulations by the state towards the private sector. This will go completely against
the need for a legal mechanism that provides for a protective and secure framework for
foreign investment and private sector participation, which was one of the primary reasons
that led to the creation of the Electricity Act, 2003 and the signing of the BIT.
The reduction in the ROE, is a regressive step towards the same situation that the State had
found itself in before it moved towards privatisation, where it was faced with a neglectful
and failing infrastructure, along with financial strain and commercial losses13. The
Electricity Act, 2003 was also formed under the policies of the BIT which, as stated above,
provided for protection of foreign investment. Its policies were also in consonance with the
tariff policies provided by the government of Dakshin Prant. It is also explicitly stated in
the DPERC regulations that the RoE should cover the financing costs of the electricity
supply, however it can be observed that the same did not occur here. This therefore leads
to a complete violation of the laws..
Therefore, it can be concluded that the reduction of the ROE from 16% to 10% is not legally
valid or justified under the Electricity Act, 2003 and the policies under which it has been
framed.
12
13
Id.Para 10.
16
ii. It is an abuse of the discretionary power by the government.
The Petitioner submits that the reduction in the ROE is an abuse of the discretionary power
provided to the government under Section 61 and 62 of the Electricity Act, 2003 along with
the policies provided under the BIT and DPERC regulations.
Section 61 14
and 62 of the Electricity Act, 2003 15
provides discretion to the State
government to determine the tariff, while keeping in mind certain criteria for protection of
the consumers and the distributors of electricity. These criteria are formed through the
policies of the BIT and the DPERC which are in consonance with the policies of the Act.
The policies contained protection and growth of foreign investment and reasonable
recovery of the cost of electricity, which includes distribution, operational and management
expenses, as stated previously by the Petitioner.
The BIT provides under Clause 2.4 provided full discretion to the State government upon
matters of taxation16. However, under clause 3.2 states that no investor shall be subject to
fundamental breach of due process. 17
Abuse of discretionary power given to the administrative authority usually takes place
when the authority uses their power for some other purpose than the one that was conferred
upon them. This action is then declared to be ultra vires. This abuse can occur through
various manners such as improper purpose where the action of the authority is motivated
by public interest, is still however, different from the action that is contemplated under the
statute. It can also occur if they act in an unreasonable manner, out of proportion or without
taking relevant considerations into matter which are expressed or implied by the law. 18
14
Electricity Act, 2003, §, 61, No.36, Act of Parliament, 2003.(India).
15
Id. §. 62.
16
Moot Proposition, Annexure 1, Para 2.4.
17
Id. 3.2.
18
Barkha Tandon, Abuse of administrative discretion- A detailed study, SCC Times. (Accessed: 12 March
2024).https://www.scconline.com/blog/post/2022/06/24/abuse-of-administrative-discretion-a-detailed-study/.
17
In Indian Railway Construction Co. Ltd. v. Ajay Kumar19, it was held that, to understand
what is reasonable, one needs to see if the administrator took into relevant consideration
the four corners of the law. Similarly, in D.K. Trivedi & Sons v. State of Gujarat20, it was
held that even if a statute grants the government discretionary power, their arbitrary actions
can be struck down.
The Petitioner states that the action taken by the government to reduce the RoE is an abuse
of discretionary power as they do not take into consideration the reasonable factors of the
operational and distribution costs that PDPL had to undertake. They acted out of proportion
when they reduced the ROE by such a large extent especially at a time period when they
were still in their nascent stage of stabilising their investment and operations. The Petitioner
further states that the abovementioned action undertaken was to please the electorate, rather
than do good for the electricity sector and its growth. 21Therefore, they might have acted to
satisfy public interest, however they went against the “four corners of the law” 22when they
took actions that could not only lead to the failure of the privatisation scheme in the
electricity sector, but also lead to deterrence from future foreign investments along with a
fallback into the previous system where there were huge commercial and operational issues
that the sector faced.
The Petitioner states that this reduction in the ROE, does not assist PDPL in covering its
operational costs, neither does it go along with the policies of the Electricity Act and the
DPERC. It can be understood that there is a fundamental breach of due process, from the
actions that are to be undertaken in consonance with these policies, which can be
understood as an abuse of the power that has been granted to the State Government.
19
Indian Rly. Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 579.
20
D.K. Trivedi & Sons v. State of Gujarat, 1986 Supp SCC 20.
21
22
Indian Railway Construction, (2003) 4 SCC 579.
18
Therefore, in can be concluded that the reduction in the ROE from 16% to 10% is an abuse
of the discretionary power that is granted to the government in relation to taxation and tariff
determination.

TARIFF ORDER DATED 29.09.2009 ON THE ISSUE OF THE REDUCTION
OF THE ROE.
The Petitioner submits that the APTEL was incorrect in rejecting the PDPL’s challenge to
the Tariff Order dated 29.09.2009 on the issue of reduction of the ROE, on the grounds that
the reduction of the RoE was i) not for public interest but for electoral appeasement and ii)
was against public policy.
i) The reduction of RoE was not for public interest but for electoral
appeasement.
The Petitioner submits that APTEL was incorrect in rejecting PDPL’s challenge to the Tariff
Order on the reduction of RoE dated 29.09.2009 as the court failed to understand that the
reason for the reduction was not public policy but was for electoral appeasement.
The Petitioner reiterates upon the use of arbitrary power by the State Government in
determining the tariff as it has been charged with under Section 61 23
and 62 of The
Electricity Act, 200324. The reduction in tariff was not done for more equitable distribution
and usage of electricity, but to create an illusion of equitability and an image that it is
working for the betterment of the people, while actually creating issues that can be
disastrous in the long run.
The Defendant might argue that it has reduced the RoE for benefit of the public. They will
however leave out the issues of how this puts a huge strain on not only PDPL but the entire
electricity sector. It is extremely crucial that in a state like Dakshin Prant which is on the
brink of an economic transformation25, to protect the investments made by companies
towards privatisation of a sector for improvement in its infrastructure and functioning. This
should be kept in mind especially considering that the main focus of bringing about PDPL
was to protect the investment by Roxxon and basing a company on the principles of BIT,
which will help transform the electricity sector of its issues.
23
Electricity Act, 2003, §, 61, No.36, Act of Parliament, 2003.( India).
24
Id. §. 62.
25
19
The argument by APTEL that going against the government in reducing the RoE, would be
going against the tariff regulations, 200926, can be deemed to be inaccurate as Clause 4.2
of the DPERC states that the tariff is to be determined on the basis of reasonable
assumptions regarding financial and operational costs.27 It should be noted that the
operational and financial costs undertaken by PDPL were huge. They had to maintain
efficient technologies, a certain standard and bring about major infrastructural upgrades.28
Therefore, it was essential for them to have an adequate return on their investment to be
able to continue their work as had been assured by them. It should also be noted that their
policy included an equitable approach towards tariff rates as they ensured affordable
electricity for their consumers while also ensuring a fair return on their investment29.
Therefore, they were in line with the policies of the DPERC, therefore, the argument given
by APTEL can be inferred to be incorrect.
The Petitioner would also like to bring to attention that the reduction in return on investment
which is a move towards making electricity less costly for the people, is extremely close to
the elections. There is a complete arbitrary switch in the policy by the government in
determination of tariff and vision for the electricity sector. 30The RoE had been set at 16%
earlier and the policy propagated by the government earlier had been that of keeping
consumer and privatisation interests in consideration when determining tariffs. It was
suddenly switched towards an illogical vision of free electricity for consumers, when there
was certain discontentment in the short run, can be seen to be done to appease populist
sentiments
Since it can be understood that the tariff change was brought about for arbitrary improper
purposes the decision is subject to judicial review. The Supreme Court in CIT v. Mahindra
and Mahindra Limited31 held that if the court can conclude that the authority took decisions
which were reached while considering extraneous matters or by adopting the incorrect
approach, the decision is qualified for judicial review. Hence, here it can be seen that the
decision for reduction in the RoE was a sudden policy change, which was taken at a time
when it would have devastating effects on PDPL and the electricity sector in the long run,
26
Id.Para 44.
27
Moot Proposition, Annexure,2 Para 4.2.
28
29
Id. Para 33.
30
Tandon, supra note 18.
31
CIT v. Mahindra and Mahindra Ltd., (1983) 4 SCC 392.
20
very close to the elections. Therefore, it is obvious that this decision was taken for electoral
appeasement.
The Petitioner would like to state that since it has been concluded that the decision was
taken in an arbitrary manner and is liable for judicial review and is not in compliance with
the policies of the DPERC, the decision of APTEL was incorrect.
ii) The reduction of RoE was against public policy.

The Petitioner submits that the decision of APTEL dated 29.09.2009 was incorrect because
the reduction of RoE went against public policy and is harmful to the State in the long run.
The Defendant will argue that the reduction of the RoE that is a move towards subsidised
electricity is an equitable for the people and hence is beneficial towards public policy.
However, they fail to realise that there are significant drawbacks to the subsidies provided,
not only to PDPL in the short run but to the entire electricity sector and system of
governance in the long run.
Subsidy expenditures are said to aggravate fiscal imbalances and create a burden on the
government which doesn’t let it prioritise public spending on sectors such as education and
healthcare. It leads to excessive energy consumption and its benefits are mostly enjoyed by
high-income households which negates the purpose of the subsidies. It also leads to
environmental degradation as there is an increase in the emission of greenhouse gases and
depletion of natural resources. It also leads to distortion in the balance of payments of net
energy importers and reduces investment in renewable energies. Subsidies can also
discourage investment in the energy sector as they reduce profits and often lead to outright
losses. They also diminish the competitiveness of the private sector in the long run. The
difference in the tariff structure which is extremely distorted from the actual cost that is
borne by the DISCOM also leads to lesser independence in the financial and operational
independence of distribution utilities. The above stated reasons show how the state
government’s decision is extremely harmful for the state. 32
One of the key facets of the BIT is that the regulatory framework provided by the
government will be transparent and provide protection to the foreign investment made by
32
Benedict Clements, Energy Subsidy Reform: Lessons And Implications, IMF, 1, 5-19 (2013).
21
Roxxon33. In the current petition it can be seen that the investment by Roxxon played a
huge role in not only facilitating the growth and privatisation of the electricity sector, but
also helped in forging positive relations between the United States of Amazonia and
Veridonia. The vision the government had with relation to privatisation and growth of the
electricity sector was encouraging more foreign investment to help in foreign relations and
reduce its financial constraints. The Petitioner reiterates that this action taken by the
government goes completely against the policies of the government as had been previously
imagined through the BIT and electricity laws. This action goes completely against the
benefit of the public health and governance, as this will prevent lead to environmental
degradation and deterioration in foreign relations with United States of Amazonia, which
will consequently deter other foreign investments, leading to the downfall of the electricity
sector.
Therefore, it can be concluded that the decision by the government was against public
policy and therefore is subject to judicial review.
(III) THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED

UNLAWFULLY IN DELAYING THE RELEASE OF THE SUBSIDY TO PDPL
.
The Petitioner submits that the government of Dakshin Prant has acted unlawfully in
releasing the subsidy to PDPL in accordance to (i) Section 65 of the Electricity Act, 2003
and (ii) it was crucial to the financial health of PDPL.
i) Section 65 of the Electricity Act, 2003.

The Petitioner submits that in accordance to Section 65 of the Electricity Act, 2003 the
government of Dakshin Prant has acted unlawfully in delaying release of the subsidy.
Section 65 states that the State Government is required to grant the subsidy to any tariff
that is determined in accordance to Section 62, and has to pay the sum in advance,
notwithstanding anything in accordance with Section 10834. Section 108 of the Electricity
Act, states that the State Commission shall be guided by matters of public interest and
policy as provided to it by the State Government35
33
34
Electricity Act, 2003, §, 65, No.36, Act of Parliament, 2003. (India).
35
Id.§ 108.
22
In the order dated 26/07/2016 in Petition No. 70 of 2015, the Punjab State Electricity
Regulatory Commission36 agreed to approve the lower tariff for new industries only on the
condition that the Government pays the subsidy. They stated that if the subsidy is not
received, the lower tariff would not apply. They also said that the burden cannot be placed
on the industries who have to be given a level playing field. In Paschimanchal Vidyut
Vitran Nigam Limited and Ors. v. Adarsh Textiles and Another37, the Court stated that it is
the prerogative of the State to grant the subsidy to the ones upon whom they are issuing the
tariff.
The Petitioner submits that it is therefore the legal prerogative of the State Government to
provide the subsidies to the DISCOMS in advance, as it is a cornerstone of the regulatory
framework as can be seen in Section 65. It is also necessary for their seamless functioning,
financial predictability and stability especially in a time period where there are wide
ranging tariff adjustments occurring to the disadvantage of the Petitioner38. At the very
outset, the tariffs as put forth by the government were disadvantageous and arbitrary
towards PDPL, in complete contrast to the Electricity Act, DPERC regulations and BIT, as
has been reiterated by the Petitioner beforehand. The only mitigating factor to the
tumultuous situation that PDPL would be put through was the subsidies that had been
promised to them by the government.
The government not providing PDPL with the subsidy, creates a situation of unexpected
intense financial strain and commercial constraints within the electricity sector which was
what the privatisation process and the formation of PDPL was supposed to mitigate and
eventually eradicate. This action by the government shows their incompetence and
indifferent attitude towards the well-being and financial health of PDPL, which is central
to their reformation process.
The Defendant may put forth the argument that it is due to other duties and responsibilities
owing to their public policy that they have taken these measures and are having delays in
releasing the subsidy, therefore employing Section 108. It should however, be known that
their delay in release of subsidy to PDPL, will be extremely disastrous. They will be
hindering the electricity sector from much needed developments along with their basic
36
S.D. Bansal Iron and Steel Private Limited v. Madhya Pradesh Electricity Regulatory Commission, 2019 SCC
OnLine APTEL 23.
37
Paschimanchal Vidyut Vitran Nigam Ltd. v. Adarsh Textiles, (2014) 16 SCC 212.
38
23
survival. They will also be hindering international investments as this will put forth the
image that they do not provide suitable protection to the same. The development of the
electricity sector and its impact on economic growth and societal progress was central to
the agenda of the government. They also had a comprehensive vision for the same39. Their
actions have clearly gone against the same, therefore creating an abysmal failure of their
policies to the public.
Therefore, the Petitioner concludes that the government of Dakshin Prant has acted
unlawfully in delaying the release of its subsidy to PDPL in accordance to Section 65 of
the Electricity Act and its public policy.
ii) Crucial to the financial health of PDPL.

The Petitioner submits that the government was unlawful in its delay in release of the
subsidy to PDPL as it was crucial to the financial health of PDPL.
In Sri. C.K. Yarram Reddy v. State of Andhra Pradesh40, the Court criticised the delay
caused by the government in making the payment to the Petitioner and stated that the
reasoning given by the government that they were in a pathetic financial condition and thus
unable to resolve their fiscal obligations was not a sufficient reason.
A paper released by the government of India, showed the crucial role subsidies played in
the financial health and stability of DISCOMS, especially when there was huge average
cost of productions to be undertaken when the tariff was regulated by the government to
provide subsidy to various consumers. They provide various graphs to show how the unpaid
subsidy payments amounted to almost Rs 6500 crores and Rs 8000 crores in the next year.
41
Another paper talked about how a significant portion of the revenue received by DISCOMS
is from the state governments and how a delay in their payments have required four major
financial bailouts in the recent years. It also reiterated through statistics how the significant
delay and short fall in payment to the DISCOMS was worsening their finances, leading
them to rely on short term borrowings with high interest rates. For example, in the state of
Haryana the cumulative outstanding subsidy was comparable to 21% of the aggregate
revenue requirement of the state’s DISCOMS.
39
Id. Para 3.
40
Sri C.K. Yarram Reddy and Ors vs. The State of Andhra Pradesh and Ors., MANU/AP/0678/2021.
41
Committee Report on Delayed Payment By Discoms To Gencos/Ipps, at 11, 11-14 (2019).
24
It also emphasised on how free electricity or lower tariffs encouraged a system of non-
payment and led to poor quality of supply and service of electricity. It also reiterated how
the dependence on state subsidy is extremely necessary due to the transitions in the
DISCOM business model, where they will require adequate transitional financing. 42
In the petition before us, it can be understood that the government cited financial reasons
as the leading cause for delaying the release of the subsidy to the Petitioner 43. As can be
understood by the laws, put forth by the Petitioner, that argument is negated by the fact that
they owe responsibility to the DISCOMS to pay them their dues on time. It can also be
inferred that the action of delaying release of the subsidy to the DISCOMS, is a persistent
practice that has an extreme negative impact on the DISCOMS.
The Defendant might also try to put forth the argument that PDPL has created a certain
situation for itself and the government is providing the best solution as an escape. However,
it is due to the lowering of the tariffs by the government that leads to an increased average
cost in supply of electricity and delayed payment of subsidies that the DISCOMS find
themselves in the tumultuous positions to begin with.
Thus, it can be inferred that this delay in the release of the subsidy is an issue which has
severe financial strains and commercial issues for DISCOMS. The government has taken a
lackadaisical approach towards PDPL and has downplayed the urgency and seriousness of
their situation. Therefore, it can be concluded that the Government of Dakshin Prant was
unlawful in delaying the release of the subsidy to PDPL, considering how crucial it was to
its financial health.
(IV) PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE

POWER GENERATORS AND THEIR NON-PAYMENT IS JUSTIFIED DUE
TO THE CIRCUMSTANCES FACED BY THEM.
The Petitioner submits that PDPL is not guilty of non-payment of dues to the power
generators and is justified in its circumstances due to (i) the doctrine of promissory estoppel
and (ii) the doctrine of legitimate expectation.
i) The doctrine of promissory estoppel.

The Petitioner states that PDPL is not guilty of non-payment and their action is justified in
accordance to the doctrine of promissory estoppel.
42
Manabika Mandal, The critical role of state government revenue subsidy in electricity supply, CFAERF,1,3
(2020).
43
25
The doctrine of promissory estoppel states that when the conduct of one party induces the
other to believe and leads him to act in a certain way, the promisor is not allowed to go
back on his promise. It is an equitable doctrine, usually used against the actions of the
government. 44Section 2(d) of the Indian Contract Act, 1872 states that when the promisee
does or abstains from doing something, it is considered to be consideration.45
Swaminathan states that the definition provided by the ICA, 1872 upholds the subjective
definition of ‘consideration’ as provided by Ames, while also providing for the protection
of induced reliance, where an act or abstinence from an act ‘at the desire of the promisor’
is made enforceable. He equates the expansive definition with the doctrine of promissory
estoppel and states its encapsulation in the contractual laws of India. He emphasised on the
underlying state of mind of the promisor. It was stated in Kedarnath v. Gorie Mohamed:
“A promise which the promisor should reasonably expect to induce action or

forbearance of a definite and substantial character on the part of the promisee, and
which does induce such action or forbearance, is binding if injustice can be avoided
only by enforcement of the promise.”
Swaminathan proceeded to argue that if the actualization of a certain state of affairs is

expected by a person he is objectively considered to have desired them, in accordance with
the standards of a reasonable person. If the promiser expects so reasonably that his promise
will induce some specific kind of reliance, promissory estoppel is said to be incorporated.
46
In Garg Acrylics v. Union of India47, the Supreme Court put down the requirements for
what circumstances constitute the enforcement of the doctrine of promissory estoppel:
“In order to apply, required that (i) one party, by word or conduct, made an unequivocal
promise or representation, (ii) the promise or representation was made with the intent
that it would be acted upon by the person to whom it was made and (iii) such other
person did actually act upon the promise, thereby altering his position. In such
circumstances, the promisor could be bound down to his promise if allowing the
44
Shreya Dave, The doctrine of promissory estoppel, Manupatra. (Accessed: 11 March 2024).
http://manupatra.com/roundup/376/Articles/The Doctrine of Promissory.pdf
45
Indian Contract Act, 1872, §2(d), No.9, Act of Parliament, 1872. (India).
46
Swaminathan, Eclipsed by Orthodoxy: The Vanishing Point of Consideration and the Forgotten Ingenuity of
the Indian Contract Act 1872,12,ASJCL, 141,142-160 (2017).
47
Garg Acryclics Ltd. v. Union of India, 2022 SCC OnLine Del 1890.
26
promisor to resile therefrom would be inequitable. Enforcement of the promise by
issuance of a writ was, in such circumstances, permissible.”
In the petition before us, the reason why PDPL found itself in a situation where it was
unable to pay its generating company was due to the non-cost reflective tariff that was set
by the government of Dakshin Prant along with the delay in the release of the subsidy that
it was inherently relying on for fiscal governance and to fulfil their contractual obligations.
48
The reasoning provided by the government was financial strains due to which it couldn’t
pay PDPL on time, which we have already argued is not a feasible explanation previously
in accordance to Sri C.K. Yarram Reddy. 49The reasonings provided by the court to not rule
in favour of PDPL on 20.03. 2012 and 16. 07. 2014 is that the circumstances are not as
important as the contractual obligations which were held to be of paramount importance.
50
It should be noted the court in itself criticises the government’s actions in delaying the
payment of the subsidy. In accordance to Section 2(d) of the ICA, 1872 and Swaminathan’s
argument it can be understood that contractual obligations existed between the government
and PDPL. In accordance to Section 65 of the Electricity Act, 2003 they are supposed to be
paid the subsidy in advance by the government51. Along with this, the government knew
the tumultuous situation PDPL was in due to the subsidy rollouts, and non-cost reflective
tariffs that the government had imposed upon them. There is an obligation upon the
government of Dakshin Prant to adhere to the policies of the Electricity Act, DPERC
regulations and the BIT.
The ‘underlying state of mind’ as had been argued by Swaminathan can be employed here
to showcase that the entire reason why the subsidy was required was to help PDPL pay off
their debts and fulfil their contractual obligations as they had made it clear several times
that the decisions being taken by the government was to their disadvantage. PDPL by
adhering to the tariff regulations, committed an act which could be taken to be consideration
that led to the formation of a contractual obligation between the two parties. Along with
this the promise made by the government to pay them the subsidy, in accordance with
Section 65 can ‘reasonably induce’ PDPL, to think that they would be paid their amount in
48
49
Sri C.K. Yarram, MANU/AP/0678/2021.
50
51
27
time for them to make their payments. Thus, the government not paying them in time,
makes it inequitable and unjust to PDPL.
While applying the test put down in Garg Acrylics52, it can be understood that there was a
promise made that was to be acted upon, in accordance with the laws and the underlying
circumstances and PDPL adhering to the tariff regulations and accepting the subsidies, puts
forth their action towards upholding their side of the promise. Therefore, promissory
estoppel has been established in the current petition.
Therefore, the Petitioner concludes that PDPL is not to be liable for the non-payment to
VDPL and the underlying circumstances and the government’s actions makes it justified.
ii) The doctrine of legitimate expectation.

The doctrine of legitimate expectation is used by the judiciary to counter unreasonableness
and uncertainty in the actions of the administration and the government. The basis of this
doctrine lies in the idea that whenever there is any hindrance caused to any individual due
to policy changes or deviations by the government then the individual can get their remedy
by exercising their legal right. This doctrine provides for the accountability of the
government which is not merely confined within the boundaries of acting reasonably but
extends to the premises of certainty and predictability.53
In BIECCO Lawrie Ltd. v. State of West Bengal, the Supreme court observed that:
“In other words, principle of natural justice is attracted where there is some right which
is likely to be affected by any act of the administration including
a legitimate expectation.”54
In Union of India v. Hindusthan Development Corporation55, it was held that the

legitimacy of an expectation can be inferred only if it is established by a sanction of law
which is legitimate and protectable. The claim based on the principle of legitimate
expectation if the denial of the expectation is found to be unfair, arbitrary and violative of
principle of natural justice. In Ashoka Smokeless Coal India Ltd. v. Union of India, it was
held that:
52
Garg, 2022 SCC OnLine Del 1890.
53
Jayanta Chakraborty, Doctrine of Legitimate Expectation-A Comparative Study of UK, USA & India,
5.1,IJLPP 21,21-41 (2018).
54
Biecco Lawrie Ltd. v. State of W.B., (2009) 10 SCC 32.
55
Union of India v. Hindustan Development Corpn., (1993) 3 SCC 499.
28
“Principle of natural justice will apply in cases where there is some right which is likely
to be affected by an act of administration. Good administration however demands
observance of doctrine of reasonableness in other situations also where the citizens
may legitimately expect to be treated fairly. Doctrine of legitimate expectation has been
developed in the context of the principles of natural justice.”56
The two essentials of the doctrine of legitimate expectation can thus be concluded to be an
expectation sanctioned by law and a violation of the principle of natural justice. If we
observe the current petition before us, Section 65 of the Electricity Act, 2003 provides the
legal backing for PDPL to have the legitimate expectation that the government would pay
them the amount in advance. 57The action by the government to not make the payment on
time to PDPL was a sudden deviation by the government which caused hindrance to the
Petitioners from making their payments to the generators. 58
It should also be observed that it is within the principles of natural justice and
reasonableness to expect payment for the subsidy especially when it is backed by law, along
with the fact that the reason why PDPL was in such a financial conundrum to begin with
was because of the decisions taken by the government which was to their disadvantage.
Therefore, for the government to violate the principles of tariff determination, put PDPL in
an unexpected tumultuous financial position and to then not provide them with the subsidy
which is required for them to be provided with legally violates all tests of reasonableness
and natural justice.
Therefore, the Petitioner concludes that PDPL is not guilty of non payment to the generators
and it is justified given the circumstances and actions by the government.

REFLECTIVE TARIFF AND CREATION OF A REGULATORY ASSET IS
NOT LEGALLY VALID AS PER THE ELECTRICITY ACT, 2003 AND THE
POLICIES FRAMED THEREUNDER .
The Petitioner submits that the actions of the DPERC in determining a non-cost reflective
tariff and creation of a Regulatory Asset is not legal and valid as per the Electricity Act and
its policies since (i) the method and reasoning for creation of the Regulatory Asset was not
legal and (ii) the surcharge given was not sufficient to recover the debt.
56
Ashoka Smokeless Coal India (P) Ltd. v. Union of India, (2007) 2 SCC 640.
57
58
29
i) The method and reasoning for creation of the Regulatory Asset was not legal.
The Petitioner submits that the method and reasoning for creation of the Regulatory Asset
was not legal and valid under the policies and laws of the Electricity Act.
Section 61(d) of the Electricity Act, 2003 states that the tariffs should be determined in a
way that allows the cost of electricity to be recovered in a reasonable manner. 59
Clause 6.1 of the DPERC Regulations state that the Regulatory Asset will be created in
consonance with Clause 8.2.2 of the National Tariff Policy60. Clause 8.2.2 states that the
Regulatory Asset will be created in a way to limit tariff impact in a particular year. It should
only be done in the case of natural clauses or force majeure conditions. The recovery of the
Regulatory Asset should be time bound and within a specific time period not exceeding
three years. It should also be noted the return on equity is not unreasonably low.61
Merriam Webster defines ‘force majeure’ as a “superior or irresistible force”. 62

The
definition given by the World Bank is that when an event is beyond the control of the
authority, including but not limited to Acts of God, such as war, earthquakes, riots, etc.63
In the case of BSES Rajdhani Power Ltd v. Delhi Electricity Regulatory Commission64, it
was stated that the creation of a Regulatory Asset created an anomalous situation where the
DISCOMS are denied and face postponement of their right to their own funds and their
return on equity. They stated that this was against the policy of the electricity laws of the
state, and was neither provided for nor contemplated while introducing privatisation. They
stated that since DISCOMS have to undertake huge operational costs they are justified in
getting their return on their investments as corporate entrepreneurs.
In the case of Noida Power Company Limited v. Uttar Pradesh Electricity Regulatory
Commission65, it was held that the creation of a Regulatory Asset leads to denial or
postponement in the return and reimbursement to the DISCOMS. The creation of the same
also leads to difficulty for the DISCOMS to fund the revenue gap till the same is met in the
59
Electricity Act, 2003, §, 61(d), No.36, Act of Parliament, 2003. ( India).
60
61
National Tariff Policy, 2016, Clause 8.2.2.
62
MERRIAM WEBSTER, Force majeure Definition & Meaning - Merriam-Webster( Last visited March 12,
2023).
63
WORLD BANK, INTRODUCTION (worldbank.org), (Last visited March 12, 2023).
64
BSES Rajdhani Power Ltd. v. Delhi Electricity Regulatory Commission, (2023) 4 SCC 788.
65
Noida Power Company Limited v. Uttar Pradesh Electricity Regulatory Commission, 2016 SCC OnLine
APTEL 61.
30
future year tariffs. Therefore, the creation of Regulatory Assets is not proper and cannot be
sustained in law.
In the current petition before us, it can be observed that the reasoning provided by the
DPERC to reduce the tariffs was due to public unrest and demands, while completely
ignoring the financial health, demands and requirements by PDPL. The government was
also not able to make the payments to PDPL, on the grounds that they were in a financial
crunch and thus they created a Regulatory Asset to finance PDPL over the years. Neither
of these two reasonings fit into the definition of what constitutes as a “force majeure”
clause.
In accordance with Section 61(d) the creation of the Regulatory Asset and the miniscule
surcharge of 9% while the revenue gap was 15%, is not legally valid as it does not allow
timely or reasonable compensation for the cost of the electricity that is incurred by PDPL.
It can also be observed that in the two judgements given above, that the creation of a
Regulatory Asset prevents the DISCOMS from getting their returns and reimbursements
and have to bear the brunt of the revenue gap whilst depending on future year tariffs. Clause
8.2.2 of the NTP states that Regulatory Assets should be created in a way where there is a
timely return of the money that is due to the DISCOMS. The Regulatory Asset created by
the government was at Rupees 2500 crores, while the minimal surcharge rate was at 9%
with the revenue gap being at 15%. 66Therefore, it is not possible to close the revenue gap
in a timely manner or help in rejuvenating the financial health and condition of PDPL.
Therefore, it can be inferred that the creation of a Regulatory Asset is not in consonance
with the policies and laws of the Electricity Act, 2003. It is just a method used by the
government to delay the return the investments and costs incurred by the DISCOMS. It also
creates more difficulty for them to close their revenue gap and to sustain the financial health
and conditions of their company. Therefore, the creation of a Regulatory asset with a non
cost reflective tariff is not legally valid.
ii) The surcharge was not sufficient enough to recover the debt.
The Petitioner submits that the surcharge set at 9% is not sufficient enough to recover the
debt of 2500 crores with a revenue gap of 15%. 67
66
67
Id.
31
In the case of Noida Power Company Limited v. Uttar Pradesh Electricity Regulatory
Commission68, it was stated that the miniscule surcharge that was set for the DISCOM after
creating a Regulatory Asset was not enough to close the revenue gap. They held that this
went against the schemes, objectives and provisions of the Electricity Act, 2003, especially
Section 61(d). In BSES Rajdhani Power Limited v. Delhi Electricity Regulatory
Commission69, it was held that the creation of the Regulatory Asset prevented them from
being repaid and recovering their debt unless there is a huge revision in the tariff rates. It
stated that the components of deferred return, carrying cost and its governance in
Regulatory Assets leads to the financial breakdown of the DISCOM’s finances. It stated
that the scheme to amortise is neither specific nor elucidated. It is an indirect passing of the
actual debt service cost and ARR to the next tariff periods without realising the effect of
such postponement, which leads to heavy consequences.
In the case of Tamil Nadu Electricity Consumers’ Association v. Tamil Nadu Electricity
Board70, it was held that the creation of a Regulatory Asset does not let the DISCOM
recover their debts while creating a cash flow problem affecting its operations and power
procurement which also have an adverse effect on maintaining a reliable power supply to
the consumers. Therefore, creation of the Regulatory Asset is neither in the interest of the
DISCOM nor the consumers.
In the current petition before us, it can be observed that PDPL was facing huge financial
issues due to the non-cost reflective tariffs that were set by DPERC. The government,
instead of giving them their due reimbursements and closing the revenue gap, created a
Regulatory Asset worth of Rs. 2500 crores71. There was a very small surcharge of 9% while
the revenue gap was of 15%. 72
The Petitioner reiterates that taking into consideration the debt that PDPL is under and their
current financial health, it is unfair to give the surcharge at a rate of 9%. This goes against
the principles of Section 61(d) of the Electricity Act which prompts for recovery of the cost
of electricity within a reasonable time. If the situation is compared with the other two
judgements that are present before us, it is understandable that this method undertaken by
68
Noida Power, 2016 SCC OnLine APTEL 61.
69
BSES Rajdhani, (2023) 4 SCC 788
70
Tamil Nadu Electricity Consumers' Association v. Tamil Nadu Electricity Regulatory Commission, 2014 SCC
OnLine APTEL 15.
71
72
Id. Para 63.
32
the government is an indirect passing of the actual debt service, while creating a cash flow
problem for PDPL. The scheme put before us by the government, puts forth a long time
before PDPL is actually reimbursed, while they are in a severe financial crunch. They will
continue to be in a position where they will not be able to increase their investments or see
their own investments in Dakshin Prant flourish. Instead, they will be in a constant state of
barely surviving. Therefore, this scheme by the government is just a way for them to
prevent themselves from having to face the brunt reality of their poor administrative choices
and is not a way of providing an equitable way of compensation to PDPL while keeping in
mind the consumers. Instead, they are violating the principles of the Electricity Act, 2003
by denying appropriate and timely reimbursement to PDPL, while also taking decisions
which will be detrimental and devastating to the consumers in the future.
Therefore, the Petitioner concludes that the creation of a Regulatory Asset by the DPERC
was illegal and not valid in consonance with the policies and laws put forth by the
Electricity Act, 2003 since the surcharge was not sufficient enough to recover the debt in a
timely manner and is not a method of providing reasonable and adequate compensation.

ALLOWED TO PLAY A ROLE IN THE ARBITRATION PROCESS
The Petitioner submits that indirect expropriation did occur through a confiscatory tariff
and therefore arbitration against Veridonia can be invoked under the BIT. The Petitioner
also submits that the DPERC cannot play a role in the arbitration process as it is a part of
the State.
i) The occurrence of indirect expropriation.

The Petitioner submits that indirect expropriation did occur in accordance to Clause 5.3 of
the BIT due to the confiscatory tariffs that was enforced upon PDPL.
Charles Warren stated that “confiscation” occurs when the rates destroy a part of the pre-
existing value of the company’s property and prevents the company from operating
successfully and prospering. In the case of, Stone v. Farmers' Loan & Trust Co., it was
stated that the power of regulation is not without limit and the power to regulation does not
mean to provide the government with the power to destroy or confiscate.73
73
Robert Hale, What Is a "Confiscatory" Rate?, 35 Columbia Law Review 1045,1045 (1935)
33
In the petition before us, it can be observed that the actions taken by the government such
as reduction of RoE from 16% to 10% which is essential in determining the acceptable
level of profitability, attractiveness of the investment climate and financial health of the
company74, along with their actions in reduction in tariff, provision of free electricity and
delay in release of subsidy which compromised the financial payment obligations of PDPL,
shows that the rates were confiscatory. These steps were taken by the government at a point
when PDPL had just undertaken huge operational costs to revolutionise the electricity
sector75. These actions led to them not being able to make their payments which prevented
them from operating successfully while also destroying their existing value due to reduction
in RoE and reduction in tariff rates. It can also be understood that these actions undertaken
by the government were wrong, as what they cited as regulation for public interest was
actually them not taking into consideration a balance of interests of both the consumers and
distributors as is required by them, therefore causing destruction to the health and benefits
of PDPL.
Article 5 of the BIT discusses what constitutes to be expropriation, while Clause 5.3 of the
same defines indirect expropriation. It states that indirect expropriation occurs if measures
taken by a Party have an equivalent effect to that of direct expropriation, by substantially
or permanently depriving the investor of the fundamental attributes of the property in its
investment, such as the right to enjoy, dispose and use its investment without formal
transfer of title or outright seizure. The same is said to be done while taking into
consideration the facts of the case, the economic impact, the duration, character, object and
intent, while also taking into consideration whether the measures breach the Party’s prior
binding written commitments through legal documents76.
Lorfing and Burghetto in their article state how deprivation which leads to expropriation
may occur when the state does not take into consideration a fair and proportional balance
in their actions towards the public and the investors. It states how ECTHR finds a particular
measure not passing the proportionality test if a less burdensome one could have equally
satisfied public interest. It also emphasised on how the negative economic impact of the
State measure must be shown by the investor to prove indirect expropriation.
74
75
Id.Para 32.
76
Moot Proposition, Annexure 1, Para 5.3
34
In Burlington Resources Inc. v. Republic of Equador, it was held that the measure is
expropriatory, even if it affects whole or a part of the investment, as long as the operation
cannot generate a commercial return77. Pope & Talbot Inc. also stressed the necessary
permanent character of the deprivation resulting from the State measure 78. These cases
upheld the sole doctrine effect test, which states that a State measure qualifies as indirect
expropriation if it impacts the foreign investors’ rights, whilst taking into account the degree
of the interference.79
Babu in his article refers to how Indian BITs mandate compensation to be freely
transferable and without delay, which forms the core of the Hull standard which emphasises
“prompt payment” which is “adequate and effective compensation”. In the India-Slovak
Republic BIT of 2006 indirect expropriation was defined and was to be assessed in
interchangeable manners with the one before us today.80
In the petition before us today, we can observe that when the government instead of taking
into consideration the requirement of striking a fair balance between ensuring a fair return
on investment and maintaining electricity affordability for consumers which was essential
for PDPL’s prosperity, violated the policies of equitability and protection of investment
which was inherently present in the BIT. Their decrease in the tariff rates which made them
non-cost reflective inherently deprived PDPL of their right to enjoy their property and carry
on their functions independently, as the State was making decisions solely for the benefit
of populist consumer interests. Instead of drastically reducing the tariff rates and providing
free electricity which favoured popular demands, the government should have found a more
proportional way of bringing about consumer interests in line without taking such drastic
steps which significantly hampered the financial health of PDPL. Along with this, their
reduction in the RoE, which is a significant way of determining the financial health of the
company, profitability and investment climate81, also hampered the enjoyment of the
investment by PDPL, while impacting the rights of foreign investors, therefore failing the
sole doctrine test. Further, the delay in the release of subsidy which led to PDPL not being
77
Burlington Resources Inc. v. Republic of Equador, ICSID Case No. ARB/08/5.
78
Pope & Talbot, UNCITRAL (NAFTA), Interim Award (June 26, 2000).
79
Pascale Accaoui Lorfing, The Evolution and Current Status of the Concept of Indirect Expropriation in
Investment Treaties and Arbitration, 6.2 IJAL 98, 103-122 (2018).
80
R. Rajesh Babu, Changing Trajectories of Investment Protection in India: An Analysis of Compensation for
Expropriation, 6 TLD 359, 360-388 (2014).
81
35
able to make payments to the generating company, also goes against the “Hull standard” of
prompt payment and effective and adequate compensation”.
Therefore, it can be inferred that the actions taken by the government do not pass the
proportionality test, alternative solution test by ETCHR or the sole doctrine test. They
should have also taken into consideration the fact that the effect of subsidised electricity
and the actions against PDPL, will have long lasting effects on public policy, investment
trust and foreign relations in the long run which will be towards the detriment of Veridonia
and PDPL. Therefore, also proving the permanency test. Thus, it can be concluded that
through the confiscatory rates imposed upon PDPL, indirect expropriation did occur in
accordance to Clause 5 of BIT.
Clause 9.5 of the BIT states that an arbitration proceeding can occur over a dispute if the
investor after at least a period of five years from the date of acquiring knowledge of the
measures has not been able to reach a satisfactory resolution even after exhausting all
judicial and administrative remedies82. Article 27 of the Vienna Convention on the Law of
Treaties (1969) states that a party may not invoke the provisions of its internal law as
justification for its failure to perform a treaty83.
In the current petition before us, PDPL first had information about the reduction in the RoE
in 2009, it has finally invoked the arbitration clause in 2021, after years of going to various
courts and seeking administrative and judicial remedies through APTEL and the Supreme
Court but to no avail. They have either been turned down, or have pending matter while
their rights, interests and protection has been violated multiple times. It should also be noted
that the Defendant may try to argue that the conditions within the country led them to take
tariff and subsidy measures, however Article 27 clearly negates that and it will not be
possible for them to put forth that their actions were for public interest and good
governance. Therefore, they are within their rights to invoke the arbitration clause.
Therefore, it can be concluded that the government did impose confiscatory tariffs which
led to expropriation of PDPL, and since they were not able to avail of any remedies within
Veridonia they are eligible to invoke the arbitration clause.
82
Moot Proposition, Annexure 1, 9.5.
83
United Nations, Vienna Convention on the Law of Treaties, United Nations, Treaty Series art. 27, 23 May
1969, 1155 U.N.T.S. 331, 8 I.L.M. 679.
36
ii) DPERC cannot be an independent arbitrator during the arbitration proceedings.
The Petitioner states that DPERC cannot play a role in the arbitration proceedings as they
cannot be considered to be an independent arbitrator since they are a part of the State of
Dakshin Prant.
Clause 10.1 of the BIT states that an arbitrator shall be independent and will not be affiliated
or take instructions from a disputing party or the government of a party with regards to
trade and investment. 84
Article 12 of the Indian Constitution states that “the State” includes the Government and
Parliament of India and the government and legislature of each of the states and all local or
other authorities within the territory of India or under the control of the Government of
India. 85
Clause 7 of Article 6 of UNCITRAL states that the appointing authority will take into
consideration the independence and impartiality of an arbitrator while appointing them.
86
Clause 1 of Article 12 states that the arbitrator can be challenged if there are justifiable
doubts regarding his impartiality or independence. 87
Clause 1 and 3 of Article 29 also
emphasise on the necessity of an impartial and independence of an expert that is appointed
by the tribunal to give their reports. 88
The test laid down in Indian Oil Corpn. Ltd89. stated that a managing authority, if it is
bound by the directions or instructions of its superior authority being the government is not
in a position to independently decide upon the dispute. In Electricity Board Rajasthan v.
Mohan Lal90 it was held that, the Electricity Board is an authority invested with certain
sovereign powers of the State. It has extensive statutory power over determination of tariffs,
operation of electricity and to make rules and regulations to administer the Electricity Act
(1948). It has therefore delegated sovereign power and can considered to be a part of “other
authority” within Article 12 of the Indian Constitution.
84
85
INDIA CONST. art.12.
86
United Nations Commission on International Trade Law art. 6, ¶ 7.
87
Id. art. 12, ¶ 1.
88
Id. art. 29, ¶ 1.
89
Indian Oil Corpn. Ltd. v. Raja Transport (P) Ltd., (2009) 8 SCC 520.
90
Rajasthan State Electricity Board v. Mohan Lal, 1967 SCC OnLine SC 18.
37
In the petition before us, it can be observed that, DPERC has the power to provide
distribution and retail supply licenses as it did to PDPL91. It also functions as the State
Regulator under the Electricity Act, to determine the annual Aggregate revenue
Requirement of the Discoms.92 It also determines the tariffs and RoE for DISCOMS93. It
also exercised its powers in creating PDPL into a Regulatory Asset.94
Therefore, it can be inferred that the DPERC does fall under the definition of “other
authority” under Article 12 of the Constitution of India as it carries out sovereign functions
of the State as mentioned above. Therefore, the powers that have been delegated to it by
the State leads the State to have significant authority over DPERC and therefore they cannot
be considered to be an arbitrator. Along with this, in accordance with the Vienna
Convention and UNCITRAL rules, the independence of an arbitrator from the State is of
extreme importance. Clause 10.1 of the BIT states the same while emphasising the need for
someone independent from the disputing party or the government of the party, both here
being Government of Veridonia. Since, DPERC falls within the ambit of the definition of
“State”, they cannot be appointed as an arbitrator. Along with this the UNCITRAL rules
also necessitate the importance of the independence and impartiality of an expert. Since,
the DPERC is so intrinsically involved in the functions and operations of the government,
they cannot be appointed for that either.
Therefore, the Petitioner concludes, that DPERC cannot play a role as an independent
arbitrator in the arbitration proceedings.
91
92
Id. Para 26.
93
Id. Para 39.
94
Id. Para 62.
38
PRAYER
WHEREFORE IN CONSIDERATION OF THE QUESTIONS PRESENTED, ARGUMENTS

ADVANCED AND AUTHORITIES CITED, THE COUNSEL FOR THE PETITIONER
MOST HUMBLY AND RESPECTFULLY PRAYS THAT THIS HON’BLE COURT BE
PLEASED TO ADJUDGE AND DECLARE THAT:
1. THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO 10%

IS NOT LEGALLY VALID ACCORDANCE TO THE ELECTRICITY ACT, 2003
AND THE POLICIES FRAMED THEREUNDER, AND IS ARBITRARY.
2. APTEL WAS INCORRECT IN REJECTING PDPL’S CHALLENGE TO THE

THE ROE.
3. THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED UNLAWFULLY IN

DELAYING THE RELEASE OF THE SUBSIDY TO PDPL.
4. PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE POWER

5. THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST REFLECTIVE

TARIFF AND CREATION OF A REGULATORY ASSET IS NOT LEGALLY VALID
AS PER THE ELECTRICITY ACT, 2003 AND THE POLICIES FRAMED
THEREUNDER .
6. PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA FOR

COUNSEL FOR THE PETITIONERS
ON BEHALF OF POWERNET DAKSHIN PVT. LTD.
PDPL.
39
.
40
41
PRAYER
WHEREFORE IN CONSIDERATION OF THE QUESTIONS PRESENTED, ARGUMENTS

ADVANCED AND AUTHORITIES CITED, THE COUNSEL FOR THE PETITIONER
MOST HUMBLY AND RESPECTFULLY PRAYS THAT THIS HON’BLE COURT BE
PLEASED TO ADJUDGE AND DECLARE THAT:
7. THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO 10%

IS NOT LEGALLY VALID ACCORDANCE TO THE ELECTRICITY ACT, 2003
AND THE POLICIES FRAMED THEREUNDER, AND IS ARBITRARY.
8. APTEL WAS INCORRECT IN REJECTING PDPL’S CHALLENGE TO THE
THE ROE.
9. THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED UNLAWFULLY IN
DELAYING THE RELEASE OF THE SUBSIDY TO PDPL.
10. PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE POWER
11. THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST REFLECTIVE
TARIFF AND CREATION OF A REGULATORY ASSET IS NOT LEGALLY VALID
AS PER THE ELECTRICITY ACT, 2003 AND THE POLICIES FRAMED
THEREUNDER .
42
12. PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA FOR
COUNSEL FOR THE PETITIONERS

ON BEHALF OF POWERNET DAKSHIN PVT. LTD.
PDPL.
43

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TEAM CODE: 02

BEFORE THE HON’BLE SUPREME COURT OF VERIDONIA

IN THE MATTER BETWEEN:

MEMORIAL FOR PETITIONER

LIST OF ABBREVIATIONS .................................................................................................... 4

i) The occurrence of indirect expropriation. ................................................................. 33

Noida Power Company Limited v. Uttar Pradesh Electricity Regulatory 30,32

BOOKS PAGE NO.

IN THE SUPREME COURT OF VERIDONIA

THE PETITIONERS HUMBLY AND RESPECTFULLY SUBMIT TO THE

1. WHETHER THE REDUCTION IN THE RATE OF RETURN ON EQUITY

(I) THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO

(V) THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST

THE PETITIONER MOST HUMBLY AND RESPECTFULLY SUBMITS:

(I) THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO

In Haryana Power Generation Corporation Limited Shakti Bhawan v. Haryana Electricity

expenses, as stated previously by the Petitioner.

fundamental breach of due process. 17

can be struck down.

that the sector faced.

(II) APTEL WAS INCORRECT IN REJECTING PDPL’S CHALLENGE TO THE

ii) The reduction of RoE was against public policy.

(III) THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED

i) Section 65 of the Electricity Act, 2003.

ii) Crucial to the financial health of PDPL.

(IV) PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE

i) The doctrine of promissory estoppel.

“A promise which the promisor should reasonably expect to induce action or

Swaminathan proceeded to argue that if the actualization of a certain state of affairs is

ii) The doctrine of legitimate expectation.

In Union of India v. Hindusthan Development Corporation55, it was held that the

(V) THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST

Merriam Webster defines ‘force majeure’ as a “superior or irresistible force”. 62

(VI) PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA FOR

i) The occurrence of indirect expropriation.

WHEREFORE IN CONSIDERATION OF THE QUESTIONS PRESENTED, ARGUMENTS

1. THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO 10%

2. APTEL WAS INCORRECT IN REJECTING PDPL’S CHALLENGE TO THE

3. THE GOVERNMENT OF DAKSHIN PRANT HAS ACTED UNLAWFULLY IN

4. PDPL IS NOT GUILTY OF NON-PAYMENT OF DUES TO THE POWER

5. THE ACTIONS OF THE DPERC IN DETERMINING A NON-COST REFLECTIVE

6. PDPL CAN INVOKE ARBITRATION AGAINST VERIDONIA FOR

COUNSEL FOR THE PETITIONERS

ON BEHALF OF POWERNET DAKSHIN PVT. LTD.

WHEREFORE IN CONSIDERATION OF THE QUESTIONS PRESENTED, ARGUMENTS

7. THE REDUCTION IN THE RATE OF RETURN ON EQUITY FROM 16% TO 10%

COUNSEL FOR THE PETITIONERS

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