' NOOR-UL-HAQ N. QURESHI, J.--- Through the instant writ petition filed under Article 199 of Constitution of the Islamic Republic of Pakistan, 1973, the petitioner has made the following prayer:- "In view of above it is most humbly prayed that this Writ Petition, may kindly be accepted and the impugned order passed by the respondent No,1 against petitioner may kindly be withdrawn/set aside in the interest of equity, justice, fair play and good conscience."
2. The factual matrix as uncurtained from the petition is that the petitioner is a public limited company, incorporated under the Companies Ordinance, 1984. The petitioner has been incorporated to set up a 200 MW power plant, proposed to be situated at Mouza Sangowali, Tehsil Wazirabad, District Gujranwala. In this respect the petitioner was granted a generation licence on May 7, 2007 by the respondent National Electric Power Regulatory Authority (NEPRA) for the said purpose. The term of generation licence as peer clause 4.1 was for a period of 25 years, commencing from the commercial operation dated (COD) of the generation facility. The licence was valid up to March 30, 2013.
3. Under Article 5 of the Generation Licence, the petitioner was required to pay the Annual Generation Licence Fee to respondent in the amount and manner at the time set out in National Electric Power Regulatory Authority Fee Rules, 2002 read with the Generation Licence. Despite best efforts the petitioner could not make the financial close and COD due to a number of factors, which were beyond its control and subsequently, the petitioner has not paid the Annual Generation Licence Fee to the respondent for the years 2009 to 2013 on account of non-generation of electricity. It is added that the petitioner could not meet its COD and the plant was not set up inter alia on account of Private Power and Infrastructure Board's (PPIB) attitude whereby they had not accepted/considered the amendments prepared by the petitioner on the recommendation of the financial Institutions, in Implementation Agreement and Power Purchase Agreement and restriction on the petitioner whereby its name was deleted from the array of companies setting up power projects in the year 2009.
4. It is further asserted that respondent initiated proceedings against the petitioner in the year 2012 for recovery of outstanding fee in terms of National Electric Power Regulatory Authority Fine Rules, 2002 (Fine Rules). Accordingly, an alleged explanation letter dated December 6, 2012, was issued under Rule 4 of the Fine Rules by respondent to the petitioner, to which the petitioner submitted a detailed response. Despite valid grounds having been raised by the petitioner, respondent directed its Registrar to issue a show-cause notice to the petitioner in terms of Rule 4(8) of the Fine Rules, whereas proceedings should have been closed condoning the violation in the light of prevailing circumstances. Respondent instead of withdrawing its proceedings against the petitioner issued a show-cause notice dated July 4, 2013 to the petitioner. The petitioner through its letter dated July 19, 2013 filed a detailed reply to the notice. Respondent through its regularity meeting, purportedly held on September 5, 2013 decided to grant an opportunity of hearing to the petitioner and accordingly the hearing was conducted on October 10, 2013. On the said date, the petitioner once again clarified it& position and raised substantial legal and other grounds for consideration of the respondent but it has passed an adverse order dated December 3, 2013 against the petitioner.
Then the petitioner filed review under Rule 5 of the Fine Rules read with Regulation 3(2) of the NEPRA (Review Procedures) Regulations, 2009 as well as other enabling provisions of law which was rejected, hence this constitutional petition.
5. Respondent opposed the petition by filing written comments.
6. Learned counsel for the petitioner contended that the impugned order is contrary to the express provisions of law; that respondent cannot demand payment on the basis of generation licence when the term has not commenced; that demand of licence fee before it is actually operative i.e, prior to the commencement of COD is unreasonable and prejudicial to the particular business interests and is in violation of terms of the licence granted to the petitioner; that as per terms of generation licence, read with 2002 Rules and Fine Rules, annual generation licence fee is to be payable yearly for the term of the licence, calculated from the COD; that the respondent failed to appreciate that since the petitioner never commenced operations or achieved COD, it cannot be forced to pay annual fee; that the procedure adopted by the respondent to initiate proceedings in respect of alleged non-payment of licence fee were in clear violation of Clause 4 of 2002 Rules and that the impugned order is based on conjecture and surmises.
7. Per contra, learned counsel for the respondent contended that petitioner is not the aggrieved party, rather it has inflicted grievance on the respondent by not depositing the money in the public fund; that the petitioner is a defaulter and it should be denied 'the protection sought in exercise of constitutional jurisdiction of this Court; that non-achievement of the financial closing or the commercial operation dates do not excuse the petitioner from waiver or write off public funds; that the petitioner has paid the General Licence Fee for the initial 2 years and now is precluded from raising such plea, that the petitioner did not file any request for revocation or cancellation of the Generation Licence; that the petitioner is not duly organized and functioning under the Companies Ordinance; that it was an obligation of the petitioner under Article 5 of the generation licence to pay the Annual Generation Licence Fee to the Authority in terms of National Electric Power Regulatory Authority Fee Rules 2002. In order to strengthen his submissions, learned counsel has relied upon the following citations:--
1. Saifullah v. Federation of Pakistan (2015 PLC (C.S.) 1304) Islamabad.
2. Pakcom Limited v. Federation of Pakistan (PLD 2011 Supreme Court 105)
3. Hafiz Hamdullah v. Saif Ullah Khan and others (PLD 2007 Supreme Court 52)
4. Muhammad Nadeem Arif v. Inspector General of Police Punjab, Lahore (2010 PLC 924 Supreme Court)
5. Faiz Sons v. Hakim son (IMPEX) Private Ltd. (1999 SCMR 2771), and
6. Mian Hakimullah etc. v. Additional District Judge (1993 SCMR 907);
8. I have heard the learned counsel for the parties and perused the material made available.
9. The petitioner was issued licence under section 15 of the Regulation of Generation, Transaction and Distribution of Electric Power Act, 1997. The date of issue is 7th May, 2007 and date of expiry is 30th March, 2034. As per clause 4.1 the licence was granted for a term of 25 years after the commercial operation date (COD). The renewal can be made 90 days prior to the expiry of terms.
This being a licence of generation, the licence fee as per National Electric Power Regulatory Authority Fee Rules, 2002 is to be paid by the petitioner company. The stance taken by the petitioner company is that after issuance of licence they paid fee for the years 2009 to 2013. Later on, they could not meet its COD as plant could not be set up on account of Private Power and Infrastructure Board's attitude by not accepting amendments proposed by the petitioner on recommendation of financial institutions, in implementation agreement and power purchase agreement. As a result name of the petitioner company was deleted from the array of companies setting a power project in the year 2009. On proceedings initiated, reply was submitted; whereby the respondent was apprised about the ground reality but they continued to press the petitioner for payment of fee. Besides the other controversy, it is a hard fact on record that by virtue of section 15 of the Regulation of Generation Transmission and Distribution of Electric Power Act, 1997 the licence issued for construction of generation facility. Section 28 of the said Act provides revocation and suspension. For convenience section 28 is reproduced herein below:---
28. Suspension and revocation.---
(1) The Authority may suspend or revoke any licence issue under this Act for consistent failure of the licensee to comply with the conditions of the licence; ' Provided that before taking action under this section, the Authority shall issue a notice to show- cause and may provide an opportunity to rectify the omission subject to such conditions as the Authority may specify.
(2) Where the Authority revokes or suspends a licence, it may undertake all or any of the following actions for continuance of the facilities covered under the licence, namely---
(a) permit the licensee to continue operating such facilities under such terms and conditions as the Authority may specify;
(b) contract with another person to immediately take over the operation of the facilities; or
(c) appoint an administrator to take over the operation of the facilities.
(3) The actions specified in subsection(2) may continue till a successor licensee takes over the charge of the facilities on such terms and conditions as the Authority may determine, including payment of compensation for the plant, machinery and other equipment installed at a facility of the licensee whose licence was revoked.
10. It is prerogative of the authority either to suspend or revoke any licence issued under the Act for consistent failure of the licensee to comply with the conditions of the licence. However, a condition has been imposed that prior to taking any action the authority shall issue a notice to show cause and provide an opportunity to rectify the omission and subject to said condition the authority may specify actions as referred to above.
11. It is very surprising to note that when conditions imposed by issuing licence could not be fulfilled, there was a revocation clause available in the statute, but instead of invoking the same, the authority was constrained to issue notice for payment of fee. From the reply submitted by the petitioner company, it appears that because of conduct of PPIB, the name of project was withdrawn from the list. In such an eventuality it was not possible for petitioner Company to continue operation even to construct the project for which licence was issued. The generation comes later on. When name of the petitioner company was withdrawn from the list of projects, it was not possible for them to continue their business and make payment towards licence fee.
Imposition of fine is to be assessed otherwise if they would have continued their operation or construction. Therefore, action initiated by the respondent authority against the petitioner company is totally contrary to law. Very legal aspect with regard to invoke section 28 ibid has been grossly ignored by authority. Therefore, initiation of A proceedings and onward super structure built on passing many other orders including review is totally uncalled for and not sustainable under the law. On the contrary the authority should have considered for invoking section 28 ibid; thereby revocation order suspending the licence should have been passed in view of prevailing circumstances as pointed out by the petitioner company. In the letter communicated time to time and responding the notices and other proceedings initiated. Therefore, in my humble view the petitioner has made out a strong case in its favour. Hence, the petition is accepted and relief claimed in the petition is granted.
12. In view of my final assessm ent, the enlisted C.Ms. Have become infructuous which are disposed of accordingly.