One day late, Rs 2 crore lost: How counting a single date decided a solar plant's fate
BESCOM cut tariff from Rs 6.10 to Rs 4.36 per kWh because a power plant was commissioned 'one day late.' The Supreme Court had to decide: does the 12-month deadline start counting from day 0 or day 1?
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BESCOM cut tariff from Rs 6.10 to Rs 4.36 per kWh because a power plant was commissioned 'one day late.' The Supreme Court had to decide: does the 12-month deadline start counting from day 0 or day 1?
A solar plant missed its deadline by one day. The penalty: Rs 2 crore per year. But was the deadline really the day BESCOM said it was?
On a single date hung the difference between a tariff of Rs 6.10 per kilowatt-hour and Rs 4.36 per kilowatt-hour. For a 10-megawatt solar plant, that gap is roughly Rs 2 crore in lost revenue every year. The plant's owners said they had made the deadline. The power buyer said they were one day late. The answer turned on a question so elementary that most lawyers would have laughed it off: when you say "12 months from today," does the clock start ticking on day zero or day one?
When the PPA was signed
The Karnataka government wanted 1,200 MW of solar power across 60 taluks. The Karnataka Renewable Energy Development Limited (KREDL) issued a request for proposals. Emmvee Photovoltaic created two special purpose vehicles to set up solar plants in Bidar and Bagepalli. Power Purchase Agreements (PPAs) were signed with the Bangalore Electricity Supply Company Limited (BESCOM) in May 2016. The signature pages of those PPAs bore the weight of a deal that would determine revenue streams for decades — each signature a commitment to a tariff that would either reward or punish the developer depending on a single calendar date.
But a PPA is not effective the moment it is signed. The Karnataka Electricity Regulatory Commission (KERC) had to approve the tariff. That approval came on October 17, 2016. The PPA defined this as the "Effective Date." From that date, Article 8.5 of the agreement gave the developer 12 months to commission the plant — the Scheduled Commercial Operation Date (SCOD).
The day the clock started
BESCOM's position was simple: the 12-month period began on October 17, 2016, counting that day as day one. Twelve months from October 17, 2016, would end on October 16, 2017. The plants were commissioned on October 17, 2017 — one day late. BESCOM argued that the general rule in Article 1.2.1(m), which includes both the start and end dates in a period running "from" a date "till" another, governed the calculation. Under this reading, the SCOD was October 16, 2017, and the developer had missed it.
The developer saw it differently. October 17, 2016, was the starting point, but it should not be counted. The 12-month period began on October 18, 2016, and ended on October 17, 2017. The plants were commissioned exactly on time. The developer pointed to Article 1.2.1(k), which stated that a reference to "month" means a calendar month, and to Article 21.1, which defined "Month" as a period of 30 days "from and excluding the date of the event." This specific definition, they argued, overrode the general rule in Article 1.2.1(m).
BESCOM did not just reduce the tariff. It also imposed liquidated damages (a pre-agreed penalty for delay) of Rs 20 lakh. The developer faced a choice: accept the lower tariff and pay the penalty, or fight.
What the contract actually said
The PPA contained two clauses that pointed in opposite directions. Article 1.2.1(m) said that when a period runs "from" a specified date "till" or "until" another date, both the start and end dates are included. Under this clause, counting from October 17, 2016, to October 16, 2017, would include both dates — making the deadline October 16, 2017.
But Article 1.2.1(k) said something different. It stated that a reference to "month" means a calendar month. And Article 21.1 defined "Month" as a period of 30 days "from and excluding the date of the event." The developer argued that this definition governed the calculation of the 12-month period, not the general rule in Article 1.2.1(m).
The PPA also contained Article 1.2.4, which expressly excluded the application of the General Clauses Act, 1897. This was significant because the General Clauses Act contains a default rule that excludes the first day when computing a period. By excluding the Act, the parties had to find their answer entirely within the four corners of the contract.
KERC's first call
The developer approached KERC, arguing that the plants were commissioned on time. BESCOM defended its position. The hearing room at KERC was filled with the rustle of paper as counsel for both sides flipped through the PPA, each pointing to the clause that favoured their client. The air was thick with the tension of a dispute that would turn on a single word: "from." KERC sided with BESCOM. Applying Article 1.2.1(m), the Commission held that the Effective Date (October 17, 2016) must be included in the calculation, making the SCOD October 16, 2017. The plants were one day late. The tariff reduction and liquidated damages stood.
The developer appealed to the Appellate Tribunal for Electricity in Delhi.
Why the Tribunal reversed
The Appellate Tribunal looked at the same clauses and reached the opposite conclusion. It held that Article 1.2.1(k) read with the definition of "Month" in Article 21.1 was the specific provision governing the calculation. Since "Month" was defined as a period "from and excluding the date of the event," the Effective Date of October 17, 2016, had to be excluded. The 12-month period began on October 18, 2016, and ended on October 17, 2017.
The Tribunal also noted that Article 1.2.1(m) applied to periods described as running "from" a date "till" another date — a different kind of calculation. The SCOD was not defined that way. It was defined as "12 months from the Effective Date," which triggered Article 1.2.1(k) and the definition of "Month." The Tribunal's judgment was a decisive reversal, and BESCOM, stung by the loss of the tariff reduction and the liquidated damages, appealed to the Supreme Court.
The Supreme Court's reading
A bench of Justice L. Nageswara Rao and Justice Vineet Saran heard the appeals in May 2021. The courtroom fell silent as the bench began reading its judgment. The court began with a familiar principle: when the language of a contract is clear, the court must give effect to it. The parties had chosen their words, and those words had to be read as a whole.
The court examined the structure of the PPA. Article 1.2 contained a series of general rules of interpretation. Article 1.2.1(k) dealt specifically with periods measured in months. Article 21.1 then defined "Month" as a period of 30 days excluding the date of the event. The court held that this specific definition must prevail over the general rule in Article 1.2.1(m). The court reasoned that where a PPA defines 'Month' as a period of 30 days from and excluding the date of the event, and the SCOD is defined as 12 months from the Effective Date, Article 1.2.1(k) read with the definition of 'Month' in Article 21.1 requires exclusion of the Effective Date in computing the 12-month period, making SCOD the date that falls 12 calendar months after (and excluding) the Effective Date.
The court also noted that Article 1.2.1(m) used the words "from" and "till" or "until" — language that described a period with two fixed endpoints. The SCOD, by contrast, was defined as "12 months from the Effective Date" — a period measured forward from a single starting point. The two clauses addressed different situations. Article 1.2.1(m), which mandates inclusion of both start and end dates for a period commencing 'from' a specified date 'till' or 'until' a specified date, does not apply to SCOD computation because the relevant provision is Article 1.2.1(k) read with the definition of 'Month' in Article 21.1, which specifically addresses periods defined in terms of 'months'. The court's reasoning was precise: the specific definition governed the general rule.
Applying the definition of "Month" in Article 21.1, the court held that the Effective Date of October 17, 2016, was excluded. The 12-month period began on October 18, 2016, and ended on October 17, 2017. The plants were commissioned on October 17, 2017 — exactly on time. The silence in the courtroom after the judgment was read was the silence of a dispute finally settled.
Why the precedents mattered
The court cited five precedents. The most significant was Investors Compensation Scheme Limited v. West Bromwich Building Society (1998), which laid down the modern approach to contractual interpretation: the court must ascertain the meaning that the document would convey to a reasonable person having all the background knowledge reasonably available to the parties. The court also cited Bank of India v. K. MohanDas (2009), which held that a contract must be read as a whole and that specific provisions prevail over general ones. Other precedents included Smt. Kamala Devi v. Seth Takhatmal & Anr. (1964), Ashville Investment v. Elmer Contractors (1988), and Bihar State Electricity Board v. M/s. Green Rubber Industries (1990).
The court found that the Appellate Tribunal had correctly applied these principles. The definition of "Month" in Article 21.1 was not ambiguous. It clearly excluded the date of the event. The parties had chosen that definition, and they were bound by it.
What this means for power contracts
The judgment is a reminder that the smallest drafting choices can have enormous financial consequences. A single day — and the question of whether to count it — decided a recurring penalty of Rs 2 crore per year. For any contract that defines deadlines in months, the parties must be precise about whether the starting date is included or excluded.
The case also illustrates the importance of the definition section. The parties in this case had taken the trouble to define "Month" in Article 21.1, and that definition saved the developer from a massive financial hit. A contract that leaves such terms undefined invites litigation.
THE PLAY: When drafting a deadline measured in months, define "Month" explicitly and state whether the starting date is included or excluded — or the courts will read the contract's own definition against you.
The Supreme Court dismissed BESCOM's appeals and gave the utility four weeks to implement the Appellate Tribunal's judgment. The solar plants would get their Rs 6.10 per kilowatt-hour. The one-day delay was not a delay at all.