A one-day delay cost a solar firm Rs 20 lakh. The twist? It wasn't late at all.

BESCOM cut a solar company's tariff by Rs 1.74 per unit because it injected power one day after the deadline. But the PPA said 'month' means 30 days from—and excluding—the start date.

The plant pushed electricity into the grid on 17 October 2017. The grid meter's needle flickered that morning, recording the injection. BESCOM saw the date and reached for its penalty book. The deadline was 16 October, the utility argued. One day late meant the tariff dropped from Rs 6.10 per unit to Rs 4.36. Plus liquidated damages (a pre-agreed penalty for delay) of Rs 20 lakh.

The developer did not argue about when the power flowed. It argued about what the date meant. The contract said the plant had to be commissioned within 12 months of the Effective Date. That date was 17 October 2016. Twelve months from 17 October 2016, the developer said, is 17 October 2017. Not 16 October.

The difference of one day — and the meaning of the word 'month' — would travel all the way to the Supreme Court.

When the clock started ticking

The Karnataka government wanted 1200 MW of solar power across 60 districts. KREDL, the state renewable energy agency, invited proposals. Emmvee Photovoltaic set up two special purpose vehicles — separate companies created for a single project — to build solar plants in Bidar and Bagepalli.

Each company signed a Power Purchase Agreement (PPA) with BESCOM. The PPA document, with the final page bearing the parties' signatures, set the tariff at Rs 6.10 per kilowatt-hour. The Karnataka Electricity Regulatory Commission (KERC) approved the PPAs on 17 October 2016. That date became the Effective Date — the day the clock started.

The PPA said the plants had to be commissioned within 12 months of the Effective Date. BESCOM read that as 16 October 2017. The developers read it as 17 October 2017. Power flowed into the grid on 17 October 2017 — the grid meter recorded the injection that day, its digits steady.

BESCOM declared the plant late by one day. It slashed the tariff to Rs 4.36 per unit and demanded liquidated damages of Rs 20 lakh.

The first two rounds

The developers challenged BESCOM's decision before KERC. The commission's hearing room was sparse — a long table, stacks of paper, the hum of an air conditioner. KERC ruled against them: the deadline was 16 October, it said, and the plant was late.

The developers appealed to the Appellate Tribunal for Electricity (APTEL) in Delhi. APTEL reversed KERC's decision. The tribunal held that the Scheduled Commissioning Date was 17 October 2017. No delay had occurred. The tariff cut and damages were invalid.

BESCOM appealed to the Supreme Court.

What the contract actually said

The entire dispute turned on three clauses in the PPA.

Article 1.2.1(k) said that a reference to 'month' means a calendar month. Article 21.1 defined 'Month' as a period of 30 days from and excluding the date of the event. Article 1.2.1(m) said that when a period is calculated from a given date, both the start date and the end date are included.

BESCOM argued that Article 1.2.1(m) applied. Since both dates were included, 12 months from 17 October 2016 ended on 16 October 2017. The plant was late.

The developers argued that the definition of 'Month' in Article 21.1 was specific and controlling. It said 'from and excluding the date of the event'. The Effective Date — 17 October 2016 — had to be excluded. Count 12 months of 30 days each from 18 October 2016, and you reach 17 October 2017.

The PPA also had Article 1.2.4, which excluded the application of the General Clauses Act, 1897 (a law that provides default rules for interpreting statutes and contracts). That meant the court could not fall back on the Act's rule that a period from a date includes that date.

Why the Supreme Court counted differently

Justice L. Nageswara Rao and Justice Vineet Saran heard the appeals in May 2021. The courtroom fell silent as the bench examined the PPA's clauses — the only sound was the rustle of paper as the judges turned pages.

The court looked at the contract's own hierarchy. Article 21.1 contained specific definitions. The definition of 'Month' was one of them. A specific definition overrides a general rule of computation. Article 1.2.1(m) was a general rule. Article 21.1's definition of 'Month' was a specific rule for this contract.

The court also noted that Article 1.2.4 excluded the General Clauses Act. If the parties had wanted the default rule of including both dates, they could have let the Act apply. They chose to exclude it.

The Supreme Court held that when a PPA defines 'Month' as a period of 30 days from and excluding the date of the event, and the Scheduled Commissioning Date is defined as 12 months from the Effective Date, the date of the event — the Effective Date — must be excluded in computing the 12-month period. The Scheduled Commissioning Date, the court held, was 17 October 2017. The plant injected power on that date. No delay occurred. BESCOM could not impose liquidated damages under Article 5.8 or reduce the tariff under Article 12.2.

The court distinguished Article 1.2.1(m) by holding that it was a general computation rule, not a specific definition. The specific definition of 'Month' in Article 21.1 controlled. The interplay with the General Clauses Act exclusion was decisive: Article 1.2.4 shut the door on any default interpretive rule that would have included the start date.

The Supreme Court dismissed BESCOM's appeals and upheld APTEL's judgment. As the four-week compliance order was read out, the bench's voice carried through the silent courtroom.

What this means for every PPA

This judgment is a masterclass in reading a contract's own definitions before reaching for default legal rules. The court did not ask what 'month' usually means. It asked what 'Month' meant in this PPA.

For practitioners, the lesson is simple: when a contract defines a term, that definition governs — even if the result feels counterintuitive. A one-day difference cost BESCOM Rs 20 lakh in damages it could not collect and a tariff reduction it could not enforce.

THE PLAY: When a contract defines 'Month' as a period from and excluding a date, count from the next day — and check whether the contract has excluded the General Clauses Act before assuming default rules apply.

The plant kept running at Rs 6.10 per unit. The word 'month' had done its work.