2025 INSC 680 Civil Appeal No.3919 of 2023 Page 1 of 22

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3919 OF 2023

THE HP POWER TRANSMISSION

CORPORATION LTD. … APPELLANT

VERSUS

M/S BRUA HYDROWATT

PVT. LTD. & ORS. … RESPONDENTS

J U D G M E N T

AUGUSTINE GEORGE MASIH, J .

1. This Civil Appeal assails the Judgment dated

17.03.2023 in Appeal No. 30 of 2023 ( “Impugned

Judgment”) by the Appellate Tribunal for Electricity at

New Delhi (“APTEL”) which reversed the findings

returned vide Order dated 27.12.2022, by Himachal

Pradesh Electricity Regulatory Commission at Shimla

(State Commission) in Petition No. 35 of 2022, holding

M/s Brua Hydrowatt Pvt. Ltd., Respondent No.01

herein (“BHP Ltd”) liable to bear the entire cost for Bay

at the 66kV Switching Station at Urni (“Bay”), which

was constructed by the HP Power Transmission

Civil Appeal No.3919 of 2023 Page 2 of 22

Corporation Limited, Appellant herein (“HPPTC Ltd”)

as per the Connection Agreement (Revised) dated

02.07.2021 “(CA dated 02.07.2021”).

2. The details of the parties before us are that the HPPTC

Ltd is a transmission licensee responsible for

executing transmission networks, including

transmission lines and sub-stations of 66kV and

above in the State of Himachal Pradesh. The BHP Ltd,

formerly known as M/s Contransys Pvt Ltd, is a

company incorporated under the Companies Act,

1956, and classified as a generating company under

Section 02 (28) of the Electricity Act, 2003.

Respondent No. 02 and Respondent No. 03, being M/s

Darjeeling Power Pvt Ltd and M/s Roura Non -

Conventional Energy Pvt Ltd respectively, are the

other generating companies engaged in hydroelectric

projects within the State of Himachal Pradesh.

Respondent No. 04 and 05 are proforma respondents,

being the State Commission and State of Himachal

Pradesh respectively.

3. The facts leading to the case are that Government of

Himachal Pradesh entered into an Implementation

Agreement with the HPPTC Ltd on 25.07.2006 to

establish the Brua Hydro Electric Project (“BHEP”),

initially with a capacity of 05 MW. The interconnection

Civil Appeal No.3919 of 2023 Page 3 of 22

was originally planned at a 33kV single circuit

transmission line at Karcham in Kinnaur district of

Himachal Pradesh. However, the Power Purchase

Agreement dated 06.04.2009 was revised through a

Supplementary Power Purchase Agreement on

09.07.2018 to increase the capacity to 09 MW at a

fixed tariff of INR 2.93 per unit. The connection at

Karcham was approved on 03.12.2010 by the

Himachal Pradesh State Electricity Board Ltd

(HPSEBL), but stood modified to be connected at Urni

instead of Karcham, allowing for the Bay in joint mode

for the three generating companies i.e. BHEP, Shaung

and Roura-II Hydro Power Project.

4. To this effect, an application for connectivity had been

submitted by the BHP Ltd on 04.07.2012 and stood

approved by the HPPTC Ltd on 18.03.2013 and

23.04.2013 leading to the Connection Agreement

dated 04.06.2014, designating Urni as the connection

point. Admittedly, the HPPTC Ltd informed the BHP

Ltd on 04.12.2015 that Bay would only be operational

after completion of the Urni-Wangtoo 66kV line and

the Wangtoo sub-station. In the interregnum, it

allowed BHP Ltd to utilize the 220kV Kahshang Bhaba

line circuit at 66kV. Further, in pursuance of direction

of the HPSEBL, the HPPTC Ltd completed a 66kV

feeder Bay at Nathpa sub-station for interim power

Civil Appeal No.3919 of 2023 Page 4 of 22

evacuation, leading to signing of Interim Power

Transmission Agreement dated 23.01.2016, requiring

the BHP Ltd to pay INR 0.14 per unit to the HPPTC

Ltd for providing interim arrangements.

5. All three generating companies i.e. , BHP Ltd,

Respondent No.02 and Respondent No.03 entered into

an Internal Tripartite Agreement dated 27.12.2019

(ITA dated 27.12.2019) to allow for proportionate

sharing of transmission charges, including the cost of

Bay installed by the HPPTC Ltd at Urni. As per the

agreement, while the BHP Ltd would handle claims for

deemed generation and Operation and Maintenance

Charges (O&M Charges), the other parties to the ITA

dated 27.12.2019 i.e., Respondent No.02 and

Respondent No.03 would reimburse BHP Ltd.

6. The HPPTC Ltd and BHP Ltd then entered the CA

dated 02.07.2021 wherein, while the HPPTC Lt d was

to manage the interconnection to the State’s

Transmission Utility System, BHP Ltd was made liable

for all the payments concerned, including the

construction cost for the Bay. Subsequently, request

was made by BHP Ltd for connection to Bay, and the

HPPTC Ltd raised a demand for INR 3,42,85,447

(Rupees Three Crore Forty -Two Lakh Eighty-Five

Thousand Four Hundred Forty -Seven only) as

Civil Appeal No.3919 of 2023 Page 5 of 22

construction cost for the Bay vide Letter dated

24.01.2022.

7. Against this demand, BHP Ltd wrote to Respondent

No.02 and Respondent No.03 for the payment of their

proportionate shares. While Respondent No. 02 agreed

for transfer of payment, Respondent No. 03 responded

with their inability to do so at that point in time.

Consequently, the BHP Ltd wrote Letter dated

10.05.2022 to HPPTC Ltd stating that it is willing to

deposit the proportionate share for itself and that of

Respondent No.02, however, Respondent No.03 shall

pay its proportionate share along with interest

subsequently. This demand was rejected by the

HPPTC Ltd vide Letter dated 30.05.2022 , citing the

sole liability of BHP Ltd under the CA dated

02.07.2021.

8. This prompted the BHP Ltd to move the State

Commission through Petition No. 35 of 2022 under

Section 86(1)(f) read with Section 158 and other

enabling provisions of the Electricity Act, 2003 and

Regulations 53, 68, and 70 of the Himachal Pradesh

Electricity Regulatory Commission (Conduct of

Business) Regulations, 2005.

8A. While dismissing the petition of the BHP Ltd vide

Order dated 27.12.2022, the State Commission

Civil Appeal No.3919 of 2023 Page 6 of 22

observed that BHP Ltd was acting as the lead partner

of the consortium, while it applied for the connection

for all three projects and agreed to pay the cost of

construction, additional charges, and O&M Charges to

the HPPTC Ltd, with the expectation that the amount

would be reimbursed by the Respondent No.02 and

Respondent No.03 in their proportionate shares,

which aspect of liability had been acknowledged by

them. The HPPTC Ltd, therefore, rightfully issued the

invoice(s) to the BHP Ltd, which is responsible and

liable for payment as per the agreement. Recovery, if

any, from Respondent No.02 and Respondent No.03

was an internal matter between them, and the HPPTC

Ltd had no concern. While rejecting the contention

that the HPPTC Ltd should issue separate bills or that

HPPTC Ltd must enter into separate O&M agreements

with the parties concerned, the State Commission

observed that the BHP Ltd must fulfil its obligations

under the agreements dated 27.12.2019 and

02.07.2021.

9. Aggrieved by the said Order, the BHP Ltd moved the

APTEL vide Appeal No. 30 of 2023 under Section 111

of the Electricity Act, 2003, which effected the

pronouncement of the Impugned Judgment dated

17.03.2023. APTEL, while considering the CA dated

02.07.2021, observed that the BHP Ltd was liable for

Civil Appeal No.3919 of 2023 Page 7 of 22

construction cost and O&M Charges of the Bay on

“mutually agreed terms”. A reference was also made to

the ITA dated 27.12.2019 stipulating that the costs

would be shared by the parties in proportion to their

individual capacities. Furthermore, the

Supplementary Power Purchase Agreement dated

09.07.2018 indicates that the interconnection

facilities required for the project, including switching

equipment, protection, control, and metering devices,

shall be installed and maintained by the HPPTC Ltd at

the Bay, with the costs to be shared proportionately

by the parties. The BHP Ltd had submitted that no

specific agreement for the payment of charges to the

Appellant under Clause 2.4 of the CA dated

02.07.2021 was executed, holding that, in the absence

of such an agreement, the demand for payment of the

entire Bay charges could not be imposed on it.

However, the State Commission concluded that the

BHP Ltd, acting as the lead partner, had agreed to pay

these charges, contrary to the assertion.

9A. Inclined with the assertions of the BHP Ltd, APTEL

further observed that the Clauses 2.4 and 2.5 of the

CA dated 02.07.2021 do not indicate that the BHP Ltd

agreed to pay the entire Bay charges and O&M

Charges on behalf of Respondent No.02 and

Respondent No.03, in addition to its own liabilities.

Civil Appeal No.3919 of 2023 Page 8 of 22

Furthermore, it does not address the scenario where

one of the generating companies fails to pay the Bay

charges or does not commission its project, leaving the

lead member responsible for the costs and charges of

such defaulting generating Company. Therefore, the

unilateral demand for payment of Bay charges by the

HPPTC Ltd for liability of other generating companies

is contrary to the terms of the CA dated 02.07.2021.

9B. Thereafter, APTEL examined the ITA dated 27.12.2019

and while rejecting the contentions of the HPPTC Ltd,

observed that it cannot place reliance on the said ITA

for its benefit without being a party therein as it does

not form part and parcel of the CA dated 02.07.2021,

nor does it govern the payment of Bay charges. While

concluding on the liability of the BHP Ltd, APTEL

observed that before the State Commission, the other

generating companies, i.e. Respondent No.02 and

Respondent No.03, had accepted their liability of the

proportionate Bay charges and an undertaking to that

effect being given by Respondent No. 03 should

similarly apply to the BHP Ltd, so as to not hold it

liable for share of other generating companies. The

interim arrangement for power evacuation should

cease once the BHP Ltd is connected through the Bay.

Respondent No. 03’s failure to commission its project

has led to complications, but the BHP Ltd cannot be

Civil Appeal No.3919 of 2023 Page 9 of 22

burdened with additional costs without explicit

contractual provisions. The Bay charges attributable

to Respondent No. 03 may be recovered by the HPPTC

Ltd after its project is commissioned or through other

legal remedies.

9C. Appeal No. 30 of 2023 preferred by BHP Ltd was

allowed vide Judgment dated 17.03.2023 passed by

APTEL; setting aside the Order dated 27.12.2022

passed by the State Commission. Further directions

were issued to HPPTC Ltd to provide connection to the

BHP Ltd and Respondent No.02 on payment of their

respective share of charges for the Bay.

10. This resulted in the HPPTC Ltd moving this Court

through instant Civil Appeal No. 3919 of 2023

assailing the Impugned Judgment passed by APTEL.

To press their claim, the counsels on behalf of the

HPPTC Ltd have asserted that even by virtue of the

ITA dated 27.12.2019 it was the BHP Ltd who was

liable to act on behalf of other two generating

companies and the mandate was limited to recovery of

the proportionate charges by BHP Ltd from the other

generating companies. It was solely BHP Ltd who was

designated as the sole applicant in CA dated

02.07.2021 for payment of charges and to settle

Civil Appeal No.3919 of 2023 Page 10 of 22

claims of deemed generation for the Bay to the HPPTC

Ltd. Furthermore, as a stranger to the ITA dated

27.12.2019, HPPTC Ltd cannot seek or enforce to

recover the other part of charges from Respondent

No.02 and Respondent No.03 which APTEL failed to

appreciate while directing HPPTC Ltd to do so.

11. Contesting the assertions by the HPPTC Ltd, the

counsels for the BHP Ltd submitted that in pursuance

of the Impugned Judgment, the parties entered into

an agreement for the O&M of interconnection facilities

as stipulated in Clause 2.5 of the CA dated

02.07.2021 which included provisions for a separate

arrangement for the execution, operation and

maintenance (O&M) of the Bay. Moreover,

proportionate share of liability arising as against the

BHP Ltd has been deposited and acknowledged by the

HPPTC Ltd vide Letter dated 01.04.2023 and the

connection has been provided at the Bay. Having

complied with the Impugned Judgment, the HPPTC

Ltd is now precluded from challenging it, rendering

this Civil Appeal infructuous. Moreover, separate bills

have been raised by the HPPTC Ltd for the three

generating companies vis-à-vis payment of provisional

O&M Charges for April 2023 to March 2024.

Therefore, it is asserted that the new Agreement dated

01.04.2023 supersedes the terms of ITA dated

Civil Appeal No.3919 of 2023 Page 11 of 22

27.12.2019 and reveals an acceptance on the part of

the HPPTC Ltd to treat the three projects separately.

11A. It was further contended on behalf of the BHP Ltd

that the APTEL rendered its decision after thoroughly

examining the relevant facts and circumstances and

that the Order dated 27.12.2022 as passed by the

State Commission was based on a fundamentally

erroneous interpretation of the terms and conditions

of the CA dated 02.07.2021 and other pertinent

documents.

12. In response to these contentions, it is argued on

behalf of the HPPTC Ltd that execution of O&M

Agreement is in compliance on the directions by

APTEL as it could not have risked contempt in case of

non-compliance as there was no stay on the Impugned

Judgment and same does not imply any concession on

part of the HPPTC Ltd. Moreover, the BHP Ltd has not

paid the Bay charges and while the Respondent No.02

attempted to pay its proportionate share, it was

refused by the HPPTC Ltd because it had no locus to

receive the amount owing the CA dated 02.07.2021

being only between the HPPTC Ltd and BHP Ltd and

accordingly, such a payment does not impact the

liability of the latter to pay charges for the Bay.

Civil Appeal No.3919 of 2023 Page 12 of 22

13. No submissions were made on behalf of other parties

in the instant Civil Appeal.

14. We have heard the submissions on behalf of the

parties at length.

15. Before perusing the legal conundrum of singular or

shared liability of the BHP Ltd as against the CA dated

02.07.2021, it is pertinent to analyze the provisions of

the terms negotiated and agreed to therein.

16. A bare perusal of the CA dated 02.07.2021 indicates

that Respondent No.02 and Respondent No.03. are

not privy to the agreement entered between the HPPTC

Ltd and the BHP Ltd. The HPPTC is referred to as

STU and BHP Ltd as Applicant in the CA dated

02.07.2021. The preamble of the said agreement

reads:

“STU and Applicant are hereinafter collectively

referred to as “Parties” and individually as

“Party”.

WHEREAS:

(A) The Applicant has applied to the STU for

connection of the Brua (9.00 MW) Small Hydro

Electric Project facility in joint mode with Shaung

(3.00MW) SHP and Roura-II (24.00MW) SHP to the

STU Transmission System and use of the STUs

Transmission system to transmit electricity to and

or from the Facility through the Intrastate

Transmission system.

Civil Appeal No.3919 of 2023 Page 13 of 22

(B) The STU has agreed to the connection of the

Brua (9.00 MW) Hydro Electric Project facility in

joint mode with Shaung (3.00MW) SHP and Roura-

II (24.00MW) SHP to the STU’s System and

Communication System (via the applicant’s Stie –

Related Connection Equipment) at the Connection

Point i.e. 66kV Feeder Bay at 66kV Switching

Station, Urni through 66kV S/C Line in joint mode

with Shaung and Roura-II SHPs using the (wave

length) Transmission and Communication System

of the STU, to transmit electricity as well as real

time data to and or from the facility through the

STU’s Transmission and Communication System.”

17. The General Conditions for Connectivity are laid down

in paragraph 01 of the CA dated 02.07.2021, and the

relevant obligations are as under:

“1.1 (b) The applicant, shall be responsible for

planning, design, construction, and safe and

reliable operation of its own equipments in

accordance with the Central Electricity Authority

(Technical Standards for Connectivity to the Grid)

Regulations, 2007, Central Electricity Authority

(Technical Standards for Construction of electrical

plants and electric lines) Regulations, Central

Electricity Authority (Grid Standards) Regulations,

Indian Electricity Grid Code (IEGC) and other

statutory provisions.

(c) The applicant shall provide necessary facilities

for voice & data communication for transfer of real

time operational data such as voltage, frequency,

real and reactive power flow, energy, and status

of circuit breaker & isolators positions,

transformer taps and other parameters from their

station to Data Collection Point (DCP) of STU as

per CGC/IEGC. STU shall provide access to

applicants data transfer through communication

network in case spare channels are available on

mutually agreed terms. The location of DCP of STU

shall be the nearest station connected electrically

where wideband communication capacity STU is

available.

Civil Appeal No.3919 of 2023 Page 14 of 22

Additional communication system from DCP to the

HPSLDC shall be the responsibility of STU

however its cost shall be borne by the applicant.

The responsibility of data transfer shall be that of

the applicant.”

18. On the liability to pay the charges and costs, it was

agreed in Clause 02 of the CA dated 02.07.2021 that:

“2 Agreement to Pay Charges and Costs

2.1 Agreement to Monthly Transmission Tariff

The applicant declares that it shall pay the Monthly

Tariff including HPSLDC charges, for use of Intra

State Transmission system, as and when long term

access, Medium-term open access or short-term open

access is availed by the applicant, in accordance

with the relevant regulations of HPERC in this

regard.

2.2 Agreement to additional costs

The applicant declares that it shall pay the cost

towards modification/alterations to the

Infrastructure of STU or Intra-State transmission

licensee/Distribution Licensee other than the STU,

as the case may be, for accommodating the

proposed connection as specified in the letter of STU

furnishing connection details.

2.3 Agreement to pay for damages

The applicant declares that it shall pay/make good

damages, if any, caused by the customer to the

property of the STU or Intra-State transmission

licensee/Distribution Licensee other than the STU,

as the case may be, which has been notified by the

STU within reasonable time of its occurrence, during

the course of control, operation and maintenance of

the equipment.

2.4 Agreement to pay Charges for construction

of Bays:

Civil Appeal No.3919 of 2023 Page 15 of 22

The applicant will execute an agreement with STU

for the erection of equipment of applicant or intra-

state transmission licensee/Distribution Licensee in

the substation premises of the STU for construction

of bays, if required. For this purpose the applicant

shall pay charges to the STU on mutually agreed

terms.

2.5 Agreement to pay O&M Charges:

The applicant shall pay O&M charges to the STU on

mutually agreed terms for the bay equipment of

applicant being operated & maintained by the STU

in their substation. These O&M charges will be

governed time to time as per the mutually agreed

terms.”

19. BHP Ltd has asserted that the ITA dated 27.12.2019

is relevant to the terms and conditions of the CA dated

02.07.2021 and also forms a part while interpreting

the latter. On that note, the relevant terms of the

former agreement between the three generating

companies i.e., the BHP Ltd, Respondent No.02 and

Respondent No.03 are as follows:

1. That all the IPPs shall pool in the power to

be generated from their generating stations at the

common 66kV terminal bay at proposed

66/220kV sub-station at Urni of HPPTCL in

District Kinnaur, Himachal Pradesh.

2. That the entire cost of common 66kV

terminal bay including metering arrangements

required to be in place for metering purpose etc.

shall be shared by the IPPs in proportionate to

their individual generating capabilities.

4. That the cost of operation & Maintenance of

the Interconnection facilities at the HPPTCL grid

as per the claim to be raised by HPPTCL shall be

Civil Appeal No.3919 of 2023 Page 16 of 22

borne by the IPPs injecting power therein in

proportionate to the installed capacity of project.

M/s Roura Non Conventional Energy Private

Limited and M/s Darjeeling Power Private Limited

shall reimburse the proportionate O&M charges to

M/s Brua Hydro Watt (P) Limited within 15 days

of raising the bills thereof. M/s Brua Hydro Watt

(P) Limited shall ensure that the payment of O&M

charges received from M/s Roura Non

Conventional Energy Private Limited and M/s

Darjeeling Power Private Limited along with their

own share of O & M charges are deposited with

the HPPTCL within 3 days. Any claim arising out

of delayed remission of O&M charges after receipt

of the same from M/s Roura Non Conventional

Energy Private Limited and M/s Darjeeling Power

Private Limited shall be to the account of M/s

Brua Hydro Watt (P) Limited.”

5. That the IPPs jointly nominate M/s Brua

Hydro Watt (P) Limited to settle the claim, if any,

of the deemed generation of the projects with the

HPSEBL in line with the decision of HPERC in the

Case no. 254/2006, M/s Sri Sai Krishna Hydro

Energies Private Limited & Others Versus

Himachal Pradesh State Electricity Board Shimla

(Annexure-B), The internal settlement of the

deemed generation claims amongst the IPPs shall

be made in proportion to the installed capacities of

the respective IPPs.”

20. A perusal of the terms of the CA dated 02.07.2021, as

referred to above would indicate that BHP Ltd moved

an application before the HPPTC Ltd for seeking

connection to the Bay and use of the said system to

transmit electricity. This was done not only on behalf

of itself, but in joint mode with Respondent No.02 and

Respondent No.03. The said request was accepted by

the HPPTC Ltd, subject to certain conditions as had

been laid down. The relevant provision, as far as the

Civil Appeal No.3919 of 2023 Page 17 of 22

present issue is concerned, is covered by Clause 02 of

the said agreement which deals with the payment of

charges and costs.

21. As per this Clause 02, all the charges were to be paid

by the applicant therein i.e. the BHP Ltd, which

included not only the monthly tariff but the payment

of costs towards modification/alteration of

infrastructure, the other charges including the

payment of damages if caused by the customer to the

property of the HPPTC Ltd as also the charges of

construction of the Bay. Even the payment of O&M

Charges were to be made by the BHP Ltd. These

terms make it clear that the sole liability was that of

BHP Ltd not only in its individual capacity but also on

behalf of the Respondent No.02 and Respondent

No.03. It would not be out of way to mention here that

CA dated 02.07.2021 was entered into between the

HPPTC Ltd and BHP Ltd only while Respondent No.02

and Respondent No.03 were not a party to the said

agreement.

22. As has been insisted upon and asserted by the

Counsel for the BHP Ltd, the ITA dated 27.12.2019,

which had been entered into between the three

generating companies i.e., BHP Ltd, Respondent

No.02, and Respondent No.03 was an internal

arrangement between them where the HPPTC Ltd was

Civil Appeal No.3919 of 2023 Page 18 of 22

not a party. The relevant provisions of the ITA dated

27.12.2019, as have been reproduced above, leave no

manner of doubt that as per the said agreement all

three of them had agreed to pool in the power to be

generated from their respective generative stations at

Bay of the HPPTC Ltd. The entire cost of the terminal,

including metering arrangements, were to be shared

between them in proportion to their individual

generating capacities.

23. Cost of operation and maintenance of the

interconnection facilities at the grid was to be borne

by all three of them as would be raised by the HPPTC

Ltd as per their proportionate installation capacity of

the project. BHP Ltd had taken up the responsibility

to be the joint nominee for all three of them to settle

the claim, if any, of the deemed generation of projects

with the HPPTC Ltd. It clearly laid down that

Respondent No.02 and Respondent No.03 would

reimburse the proportionate amount due as per the

agreement to BHP Ltd within 15 days of raising of the

bills by the HPPTC Ltd. BHP Ltd was to ensure the

payment to be made to the HPPTC Ltd and thereafter

seek reimbursement in case of non -payment of the

amount by the other generating companies within the

time stipulated. What, therefore, turns out is that the

primary responsibility had been taken upon itself by

BHP Ltd, taking the lead for the other two generating

Civil Appeal No.3919 of 2023 Page 19 of 22

companies and thereafter recover the proportionate

amount as per the respective installed capacity of the

project of the other two generating companies i.e.

Respondent No.02 and Respondent No.03.

24. Liability, if any, being therefore upon BHP Ltd as per

the CA dated 02.07.2021 with HPPTC Ltd not being a

party to ITA dated 27.12.2019, the latter could not

have and cannot claim proportionate shares as per the

installed capacity of the project from Respondent

No.02 and Respondent No.03. The right, if any, of the

claim and recovery of the liability from Respondent

No.02 and Respondent No.03 would be only with BHP

Ltd. The HPPTC Ltd, therefore, has rightly put forth its

claim to BHP Ltd.

25. Having considered the provisions of the

contracts/agreements as above, we should ideally be

considerate of the impact of the liability of the charges

under the CA dated 02.07.2021, if so imposed on

Respondent No.02 and Respondent No.03 through

existing legal doctrines and decisions of the Courts.

26. The Doctrine of Privity, as originally introduced in the

decision of Tweddle v. Atkinson

1 and acknowledged

by the Privy Council in Jamna Das v. Pandit Ram

1

(1861) 121 ER 762

Civil Appeal No.3919 of 2023 Page 20 of 22

Autar Pande and others

2, still holds relevance when

it comes to contractual rights and obligations of

parties inter se. In a similar factual backdrop, as in

this case, vis-à-vis relationship between the parties

and their ability to sue for recovery thereof, a three-

Judge Bench of this Court in Essar Oil Limited v.

Hindustan Shipyard Limited and Others

3 denied

the Appellant therein, to sue ONGC for recovery of

payment in its capacity as a sub-contractor, as it was

not privy to the contract between the ONGC and

Respondent-Contractor. Their reliance on some direct

payments made to it by ONGC were observed to be not

sufficient to establish privity of contract.

27. In the light of the above legal position, if the

contentions of the BHP Ltd are accepted by this Court,

HPPTC Ltd would technically have no legal remedy to

recover its dues or other charges from Respondent

No.02 and Respondent No.03 in event of a default as

they are not under any contractual obligation to

discharge any liability towards the HPPTC Ltd vis-à-

vis the Bay.

28. Therefore, it is our opinion that the APTEL was

incorrect in not considering the absence of privity of

Respondent No.02 and Respondent No.03 to the CA

2

1911 SCC OnLine PC 35

3

(2015) 10 SCC 642

Civil Appeal No.3919 of 2023 Page 21 of 22

dated 02.07.2021, especially when it went on to

observe that the ITA dated 27.12.2019 cannot be

relied upon by the HPPTC Ltd for its contentions as it

does not form part and parcel of the CA dated

02.07.2021. An equivalence should have then been

drawn by the APTEL to consider the fact that

Respondent No.02 and Respondent No.03, although

beneficiaries to the liability of the HPPTC Ltd to

construct, operate and maintain the Bay through the

CA dated 02.07.2021, could not have been held liable

for the charges when explicit wording in the CA dated

02.07.2021 only binds BHP Ltd for the payment of

concerned cost and charges.

29. If that be so, as per the terms of agreement, the

Impugned Judgment of the APTEL is based upon

wrong assumptions and misread ing of the terms of

agreement ignoring the basic principle that a party not

privity to the agreement or contract cannot be, unless

the context otherwise makes it apparent, made liable

for any term(s) and condition(s) unrelated to it.

30. Accordingly, the decision rendered by the State

Commission is good in law , and the observations

herein above mandate that the Impugned Judgment

as passed by the APTEL be set aside.

Civil Appeal No.3919 of 2023 Page 22 of 22

31. Therefore, the instant Appeal is allowed in favour of

the HPPTC Ltd to the effect that the Impugned

Judgment dated 17.03.2023 passed by the APTEL is

set aside and the Order dated 27.12.2022 passed by

the State Commission is restored.

32. There shall be no order as to costs.

33. Pending application(s), if any, stand disposed of.

……...……….……………………..J.

[ ABHAY S. OKA ]

……..………..……………………..J.

[ AUGUSTINE GEORGE MASIH ]

NEW DELHI;

MAY 14, 2025