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2018 DIGILAW 311 (UTT)

Sheela Bahuguna v. Union of India

2018-06-13

SUDHANSHU DHULIA

body2018
JUDGMENT : Sudhanshu Dhulia, J. Dispute involved in all these writ petitions is common, hence these are being decided by this common judgment. For the sake of reference, the facts of WPMS No.2964 of 2017 (Mrs. Sheela Bahuguna Vs. Union of India & others) is being referred herein below. 2. The Government of India in order to give incentive for the use of “alternative sources of energy”, such as “solar energy”, has come up with various schemes from time to time, through its Ministry of New and Renewable Energy. In furtherance of this policy for the use of solar energy, a scheme was introduced by the Government of India to encourage the use of “Grid Connected Rooftop and Small Solar Power Plants Programme”, on residential buildings and industrial/commercial establishments. The Scheme was introduced on 26.06.2014 and it was a part of Jawaharlal Nehru National Solar Mission and the particular guidelines was called “Grid Connected Rooftop and Small Solar Power Plants Programme” (from hereinafter referred to as “RTS”). The background of the scheme which is contained as Annexure to the order dated 26.06.2014 is extremely important and it must be reproduced. It lays down as under:- “The Government had launched Jawahrlal Nehru National Solar Mission during 2010-11, which is a major initiative of the Government of India and State Governments to promote ecologically sustainable growth while addressing India’s energy security challenge. It will also constitute a major contribution by India to the global effort to meet the challenges of climate change. The immediate aim of the Mission is to focus on setting up an enabling environment for solar technology penetration in the country both at a centralized and decentralized level. The first phase (up to 31st March 2013) focused on promoting off-grid systems including hybrid systems to meet/supplement power, heating and cooling energy requirements. Based on the experience gained during the 1st phase of the Mission, the programme is being expanded with a focus on energy access and replacement of fossil fuels with renewable energy. These systems still require interventions to bring down costs but the key challenge is to provide an enabling framework and support for entrepreneurs to develop markets. The scheme is completely demand driven. Solar energy including thermal and PV is second largest renewable energy source after wind energy. Around 60 million households worldwide use solar hot water collectors. These systems still require interventions to bring down costs but the key challenge is to provide an enabling framework and support for entrepreneurs to develop markets. The scheme is completely demand driven. Solar energy including thermal and PV is second largest renewable energy source after wind energy. Around 60 million households worldwide use solar hot water collectors. Total worldwide installed capacity is 235 GWth (335 million sqm.). India was ranked 4th in the world in terms of new capacity addition during the year 2011. Installed capacity for India stands at 7.281 million sq m2 equivalent to 5082 MWth till 30th October 2013. Worldwide these achievements were possible with interventions in the form of capital subsidy/incentive in Electricity bill/mandatory provisions through heat laws. In India Fossil fuels are being used for process heating, drying, distillation/desalination, water heating, space heating, refrigeration and power/electricity generation. Nearly 25 million households are using electric geysers, consuming ~ 7500 GW-hr of electricity (assuming minimum annual consumption of ~600 KWh/year/geyser) and 15 million tons/year of petroleum fuels are used in industries in thermal form at temperature below 300° C. It is assumed that 30% of energy consumed in industry is used for heating water, which shows that there is a huge potential. There is a large potential available for generating solar power using unutilized space on rooftops and wastelands around buildings. Small quantities of power generated by each individual household, industrial building, commercial building or any other type of building can be used to partly fulfill the requirement of the building occupants and surplus, if any, can be fed into the grid. The roof-top SPV systems on building’s roof space can be installed to replace DG gensets for operation during load shedding. The price of power generated from solar plants installed today is at par with or lower than the commercial tariff for consumers. The cost of solar power is on the decline trend while the cost of fossil fuel based electricity is increasing day by day. The cost of generating solar power at present is a little higher than the tariff charged from consumers by Distribution/Licensees/DISCOMS in most cases (other than commercial). The cost of solar power is on the decline trend while the cost of fossil fuel based electricity is increasing day by day. The cost of generating solar power at present is a little higher than the tariff charged from consumers by Distribution/Licensees/DISCOMS in most cases (other than commercial). With the capital subsidy (upto 30%) or so, it may be possible to generate power between Rs.5.0 – 6.50 per unit for the next 20 years, which is cheaper than the diesel gen-set based electricity and this could also be cheaper than the cost at which most Distribution Licensees/DISCOMS would make power available to the same consumer. It is therefore important to popularize the use of solar energy so that people gain confidence and then its use can increase on its own.” 3. The scheme also goes on to state that the RTS shall be connected to the Grid. It lays down as to how the meter has to be installed and at what places, etc. Thereafter it broadly defines as to what is going to be GTR. Clause 3.2 of the scheme reads as under:- “3.2 The grid connected rooftop solar photovoltaic power generation plants up to a maximum capacity of 500 KWP per project/system to generate electricity/power would be eligible under the Programme. The minimum capacity of 1.0 KW would be eligible under this Programme. The programme may be implemented in Urban and Rural Areas as well. The programme encourages installation of rooftop solar photovoltaic power generation plant for self-consumption as well as supply/sale of electricity to the grid. 4. Paragraphs 6.2 and 6.3 of the Scheme relate to the subsidy to be given by the Government of India on these projects which read as under:- “6.2. MNRE would provide financial support in accordance with the benchmark cost and subsidy levels fixed by MNRE every year or on half yearly basis. The present CFA would be 30% of the benchmark cost of the grid connected rooftop and small solar power plants. However, it can be revised by MNRE time to time. The benchmark cost of a PV system will include the hardware cost up to the site including PV modules, inverters, minimum storage battery, cost of meters, local connectivity cost, cost of civil works, foundations, installation, operation and maintenance for a period of five years, comprehensive maintenance for a period of 5 years, warranty for the complete systems, etc. The benchmark cost of a PV system will include the hardware cost up to the site including PV modules, inverters, minimum storage battery, cost of meters, local connectivity cost, cost of civil works, foundations, installation, operation and maintenance for a period of five years, comprehensive maintenance for a period of 5 years, warranty for the complete systems, etc. 6.3 In Special Category states viz. North Eastern States, Sikkim, Jammu and Kashmir, Himachal Pradesh and Uttarakhand, Lakshadweep, A&N Islands etc. the CFA upto 70% may be provided. This subsidy pattern can be accessed ONLY by Central and State Government Ministries, Departments and their organizations, State Nodal Agencies, SECI and Local bodies. This will be applicable for the projects at Central and State Government Ministries and their organizations (excluding PSU/Corporate buildings); Government Educational Institutions, Hospitals, community centers, Anganwadis, Panchayat Ghars, State/Central Government Buildings, Municipal Corporation Buildings, Police Stations, Police Posts, vocational training centers, Government hostels etc. depending on requirement.” (Emphasis provided) 5. A perusal of the aforesaid scheme shows that for installation of a RTS for the special States, which includes Uttarakhand, the subsidy would be up to 70%. In other words, if the cost of installing a RTS is rupees one crore, then rupees seventy lakhs shall be borne out by the funds provided by the Government of India. This is being done, according to the petitioners, to encourage the use of alternative source of energy, which in this case is solar energy. 6. The scheme further states that the size of a Unit shall be between 1 KWp to 500 KWp. It further states as to who are the categories of beneficiaries. Categories of beneficiaries are as under:- “All categories including individuals, Industrial/ Commercial/Non Commercial entities” 7. This scheme was amended by the Ministry of New and Renewable Energy, Government of India vide order dated 04.03.2016 where the capital subsidy remained the same for the special category States like Uttarakhand which is 70% but such a subsidy was limited only to the residential, institutional (hospitals, educational institutions etc.), social sectors etc. and it was clarified that there will be no subsidy for commercial and industrial establishments in the private sector. It was specifically provided to all types of residential buildings. In other words, after the amendment, the benefit of subsidy up to 70% can only be granted if RTS is installed in a residential building. 8. and it was clarified that there will be no subsidy for commercial and industrial establishments in the private sector. It was specifically provided to all types of residential buildings. In other words, after the amendment, the benefit of subsidy up to 70% can only be granted if RTS is installed in a residential building. 8. In the present case, the petitioners claim that they were working in pursuance of the above two schemes announced by the Government of India in its orders dated 26.6.2014 and 4.3.2016 and they had started the work for installing the RTS in their buildings, but later they were forced to stop their work in consequence of the impugned order dated 19.09.2017 of the Ministry of New & Renewable Energy, Government of India, which is addressed to the Director, Uttarakhand Renewable Energy Development Agency (from hereinafter referred to as “UREDA”), and states that in Uttarakhand the “Grid Connected Rooftop Solar Power Programme” the subsidy was being given to only such persons who have installed the RTS system on the rooftop of the buildings, whereas on an inspection by a team of Ministry of New & Renewable Energy, Government of India, it has been found that barring one unit of 3 KWp installed in Haldwani, the remaining units as per the list do not qualify to be covered under sectors eligible for the subsidy in terms of the guidelines of Government of India given in the notification dated 04.03.2016 as these units (which do not include the present petitioners before this Court), are installed not merely on the rooftop, but on the appurtenant land of the building as well, for which no subsidy is liable to be given to them under this scheme. 9. The units which were inspected by the team of Ministry of New and Renewable Energy do not include the units of the present set of petitioners as such units were functional units. The petitioners are aggrieved as a fallout of this inspection as later they received a letter dated 19.9.2017 which states as under:- “In view of the above, UREDA shall refrain from sanctioning subsidy to such projects in future and project proposals if any received against 24 MWp sanction of MNRE, should not be considered. The petitioners are aggrieved as a fallout of this inspection as later they received a letter dated 19.9.2017 which states as under:- “In view of the above, UREDA shall refrain from sanctioning subsidy to such projects in future and project proposals if any received against 24 MWp sanction of MNRE, should not be considered. Further, UREDA shall not release subsidy to these 10 projects (as per the enclosed list) and if already released, shall recover the entire amount from these beneficiaries and remit it back to MNRE. However, UREDA may take up the issue of these beneficiaries with Uttarakhand Electricity Regulatory Commission (UERC) to include them under commercial tariff (without subsidy) category so that the plants installed can produce electricity and feed into grid.” 10. In pursuance to the said letter, UREDA which is the implementing agency or the nodal agency of the Government of India in these matters has issued a communication to the petitioners that they are now not eligible for the subsidy. Aggrieved, the petitioners have filed the present writ petitions before this Court. 11. Prior to this, in terms of the policy dated 26.6.2014 and the amended policy dated 4.3.2016 of the Government of India, UREDA published an Invitation for Expression of Interest (EoI) on 29.09.2016 and invited applications from the interested persons willing to install the “Grid Interactive Rooftop and Small Solar Power Projects” of 5 KWp to 500 KWp capacity in the residences, hospitals or educational institutions. It is made clear that the subsidy as proposed by the respondents was applicable only for the sectors including residential, institutional (hospitals, educational institutions, etc.), social sectors etc. Petitioners have applied to the same and the UREDA entered into contract with the petitioners on 9.3.2017 and the petitioners had to finish the project within the next 90 days. 12. It is the case of the petitioners that they have installed RTS of capacity under 500 KWp or 500 KWp, in their residential premises and according to them, they are eligible for the subsidy, but consequent upon the order dated 19.9.2017, UREDA sent a letter dated 24.4.2017 to all the petitioners which states as under: “To, All Applicants Registered under Rooftop Solar Power Plant Scheme (As per list enclosed) Sub: Regarding Grid Connected Rooftop Solar Power Plant allotted by UREDA as per enclosed list. Dear Sir, As per new direction received from MNRE, the installation of Rooftop Solar Power Plants is to be done on different buildings in residential/institutions/social sectors only. You are requested to install the Solar Power Plant accordingly. In case of any deviation the subsidy shall not be admissible. Enclosed: List of 93 nos. applicants. Yours Sincerely (Dr. Umakant Panwar) Chairman/Director UREDA” 13. It is an undisputed fact that prior to the aforesaid letter of the UREDA, award for installation of Solar Power Plant had already been given to the petitioners on 9.3.2017 where commitment for grant of 70 per cent subsidy was made. There was another condition that the petitioners shall enter into contract with the distribution company (DISCOM) which in the present case is “Uttarkhand Power Corporation Ltd.” for sale of surplus solar energy at a much lower rate than what was already applicable to those who were not getting subsidy. Petitioners already entered into agreement with Uttarakhand Power Corporation Ltd. under which for 25 years, they will supply electricity to Uttarakhand Power Corporation Ltd. at the rate which is much lower than the commercial rate and this is one of reasons that the petitioners have obtained the subsidy. 14. Counter affidavits and rejoinder affidavit have already been exchanged. 15. The admitted facts in this case are that the Government of India through its Ministry of New and Renewable Energy has come up with a scheme to encourage the use of solar energy in the entire country and there is a special incentive in some States which include Uttarakhand, inasmuch as in other States the subsidy is only 30 per cent of the installation cost, but in the case of special category States like Uttarakhand this subsidy goes to 70 per cent. It is again an admitted case that as of now this subsidy can only be given if the RTS is installed in the residential buildings, hospitals and educational institutions. 16. Since we are presently concerned only with the residential buildings, which is an admitted fact, we would confine ourselves with the subsidy available for the installation of RTS on the rooftop of the residential buildings. The only question is as to what constitutes a residential building and more importantly as to what is the rooftop solar or RTS? 17. 16. Since we are presently concerned only with the residential buildings, which is an admitted fact, we would confine ourselves with the subsidy available for the installation of RTS on the rooftop of the residential buildings. The only question is as to what constitutes a residential building and more importantly as to what is the rooftop solar or RTS? 17. The report given by the inspection team to the Government of India and the subsequent instructions issued by Government of India to UREDA are based on the fact that the subsidy is being misused in Uttarakhand inasmuch as the purpose of the subsidy was that only if the RTS is installed on the “rooftop” of residential building that such subsidy can be given, but on inspection it has been found that the solar plants are installed not only on the rooftops but these are also installed everywhere on the vacant appurtenant land of the building which makes such a system ineligible for the subsidy. This being the genesis which culminated into the letter of UREDA to all the petitioners that they will not be liable to subsidy as the petitioners were in the process of installing the RTS not only on the rooftops but also on the land appurtenant to the building. 18. The question whether it is permissible or not, and the more important question would be that whether in such a case, petitioner would be liable to be given the subsidy by the Government of India or not? 19. At this stage, it must also be stated that the UREDA which is the nodal agency in Uttarakhand is totally supportive to the petitioners and their case before this Court, and its case is that they have followed the guidelines and the instructions of the Ministry of New and Renewable Energy in its letter and spirit. According to UREDA, a Rooftop Solar does not merely mean a system which can be installed only on the rooftop, but it includes a system which can be installed on the land as well. The only embargo is that it should not have the capacity of more than 500 KWp because a system of more than 500 KWp capacity would not be a small system and the subsidy scheme is primarily meant for small systems. 20. The only embargo is that it should not have the capacity of more than 500 KWp because a system of more than 500 KWp capacity would not be a small system and the subsidy scheme is primarily meant for small systems. 20. Admittedly, neither the “building” nor the “rooftop” has been defined anywhere in the policy or in the orders of the Government of India. However, petitioners have relied upon the Vision Document of the Government of India contained in Annexure No. 11 to the writ petition wherein while defining the RTS, it has been stated as under: “The concept of rooftop solar is based on the scale of the PV plant rather than the fact whether it is situated on a roof/terrace or not. Hence, the definition of RTS also includes small solar plant on the ground.” 21. Petitioners have also taken a clue from the policy contained in the order dated 26.6.2014 issued by the Government of India wherein it has been stated that “There is a large potential available for generating solar power using unutilized space on rooftops and wastelands around buildings.” and would argue that a rooftop would not merely mean a top of the roof but also includes the appurtenant land of the residential buildings in their case. 22. The argument of the learned Counsel for the Union of India would be that this has been clarified in the subsequent amendment dated 4.3.2016 wherein it has been clearly stated that benefit will be given to all types of “residential buildings”. The emphasis of Government of India is on “buildings” and they have vehemently defended their case stating that rooftop installation installed on a building alone is eligible for the subsidy. In other words, such installations which are installed on the appurtenant land of the building and on the wasteland shall not qualify for the subsidy. 23. Learned Counsel for the UREDA Mr. V.K. Arora who supports the case of the petitioners, has relied upon the communication took place between Ministry of New and Renewable Energy and the UREDA, where the Government of India on 23.2.2016 has sought clarification in a particular case, i.e. in the case of Kuldeep Tomar, who was sanctioned the project of the capacity of 500 KWp. In the said communication a query was made by the Ministry of New and Renewable Energy from the UREDA. In the said communication a query was made by the Ministry of New and Renewable Energy from the UREDA. The query was – “Please clarify whether Ground mounted or Rooftop system”. In answer to this query, UREDA replied on 24.2.2016 that it is a project which is “Ground mounted system under rooftop scheme”. Mr. Hiren Chandra Borah, who is a Scientist in the Ministry of New and Renewable Energy and who is present in person before this Court admitted this fact that this was sanctioned prior to March, 2016 amendment. 24. A great emphasis, therefore, has been laid by the Government of India on the amendment carried out in the scheme in the year 2016, and its counsel Sri Lalit Sharma would submit that the benefit shall only be given to “all types of residential buildings”. However, the fact remains that the Government of India is yet to define as to what constitutes a “building” which is eligible for such a subsidy? Moreover, “rooftop solar” has nowhere been defined except in the Vision Document which has already been referred to above, which mean that it also includes installation on ground, provided it is less than 500 KWp. 25. Having heard learned Counsel for the parties, it transpires that the benefit of subsidy was to be given to small solar projects which would mean a project having capacity between 1 to 500 KWp. All projects which are eligible for subsidy, first of all, must qualify this fundamental eligibility which is that the capacity of the installation should not exceed 500 KWp. The second and important aspect is that such a project in the case of the present petitioners should only have been installed in their residential buildings alone. In other words, in case it is installed in a shop or in a commercial establishment and even if its capacity is less than 500 KWp, it is not eligible for the subsidy. 26. The only question is whether a project or part of installation which is apart from the rooftop of the building and is installed in the appurtenant land will make such a project ineligible for the subsidy? 27. In my considered opinion, this cannot be done because the clear indication has been given in the project document which says “There is a large potential available for generating solar power using unutilized space on rooftops and wastelands around buildings”. 27. In my considered opinion, this cannot be done because the clear indication has been given in the project document which says “There is a large potential available for generating solar power using unutilized space on rooftops and wastelands around buildings”. Moreover, in normal nomenclature also, the land appurtenant to a building is usually considered a part of the building, such as its garden, lawn, etc. Therefore, in case the petitioners have installed or in the process of installing their projects in their residences, they shall be eligible for the subsidy if they have installed on the rooftop or on the land appurtenant to the building. 28. Learned counsel of the Government of India argued that the Vision Document is not part of the subsidy scheme. It is true that Vision Document is not part of the subsidy scheme, but considering the fact that the “rooftop solar” has been defined nowhere, and this is the only place where the definition has been given, therefore, it has been adopted by this Court. Moreover, learned Counsel for the petitioners also pointed out the letter dated 13.1.2017 in which Joint Secretary to the Government of India has also relied upon the said definition. 29. There is a larger question here which also needs to be explained. The question is of Promissory Estoppel. The vision document, Government Order of 2014 and even the subsequent amendment of the year 2016 clearly encourage the use of alternative energy, which in the present case is solar energy. There are obvious incentives in the form of Government subsidy for adoption of this alternative form of energy. An agreement has been reached between the petitioners and the implementing agency/nodal agency i.e. UREDA, subsequent to which the petitioners have purchased the solar energy equipments which they have installed at their premises. Not just this, they have already entered into an agreement with the Uttarakhand Power Corporation Limited for the transfer of surplus solar energy, for which according to the petitioners, a contract has also been executed. The doctrine of Promissory Estoppel is an equitable doctrine, which under the present facts and circumstances of the case is applicable against the respondents. 30. Under these circumstances, Union of India or its nodal agency UREDA is not justified in withholding the subsidy which has motivated the petitioners to come forward and make these installations in the first place. 31. The doctrine of Promissory Estoppel is an equitable doctrine, which under the present facts and circumstances of the case is applicable against the respondents. 30. Under these circumstances, Union of India or its nodal agency UREDA is not justified in withholding the subsidy which has motivated the petitioners to come forward and make these installations in the first place. 31. This determination, however, is with one important caveat. This Court makes it absolutely clear that any installation which is done outside the “residential building”, i.e. either on an agricultural or waste land or a land which is not being used for residential purpose, shall not be eligible for the subsidy. This Court has been constrained to make this observation as specific allegations have been made by learned Counsel for the Union of India as well as the officer of the Government of India present before this Court that this benefit of subsidy has a great potential to be misused at the hands of such persons who are in the process of installing it in an agricultural land or waste land which was never the purpose of the scheme, at least not for grant of subsidy. Therefore an installation, outside the actual residential house of the claimant shall not be eligible for subsidy. 32. In view thereof, the present petitions are disposed of with the observation that the Government of India will be at liberty to make inspection of all the projects and in the light of the directions given hereinabove, either sanction the projects or limit the sanction of the projects to such an area where it is permissible, under the law. 33. Writ petitions are partly allowed. The impugned order dated 19.9.2017 shall stand modified to the extent indicated above.