GREEN SIGNA: Farmers need government nod to use their land for non-agricultural purposes such as solar power generation | Photo Credit: Debu Durlav

A force majeure event is one where affected persons have no control over the development. Examples include natural calamities such as floods or earthquakes, which render some commercial commitments impossible to honour.

Sharada Doddi, a land-owning farmer in Bidar, Karnataka, approached the Appellate Tribunal for Electricity in 2023 to challenge an order issued against her in 2019 by the Karnataka Electricity Regulatory Commission (KERC). The term force majeure is key to this legal tangle.

Several land-owning farmers enter into agreements with power distribution companies for the purchase of energy generated on their land. Farmers keep their end of the bargain by first securing government approval to use their land for non-agricultural purposes. They need the approval to raise bank loans and put up solar panels for power generation.

Pacts with distribution companies allow for a fixed charge per unit of power generated.

In Doddi’s case, she wished to establish a 1 MW solar power project under Karnataka’s Solar Power Policy, and signed a power purchase agreement (PPA) with Gulbarga Electricity Supply Company Limited (GESCOM) in 2015. The agreement stipulated commissioning the plant by January 1, 2017. However, it was delayed by four months and commissioned in late-April. In March, GESCOM had granted a six-month extension.

The primary reason for the delay, according to Doddi, was the time taken to secure government approval for converting her property into non-agricultural land. She was unable to get bank loans due to the delays, she said. These, according to her, were events beyond her control and hence constituted a force majeure event under the PPA. GESCOM, while initially granting her an extension, later argued that the delays were attributable to Doddi and did not qualify as force majeure.

KERC rejected the extension and ruled that the delay was attributable to Doddi’s own actions. It dismissed her petition and directed her to pay damages, while reducing her solar power tariff from ₹8.40 per unit to ₹4.36 per unit.

KERC had to intervene because it had issued directions requiring solar developers to approach the commission for the approval of time extensions granted by distribution companies.

Tribunal’s take

Doddi challenged the KERC order at the appellate tribunal, which set aside KERC’s decision to disallow the extension granted by GESCOM and the imposition of damages. The delay in land conversion, the tribunal observed, was a generic issue faced by many developers in Karnataka and the banks’ reluctance to provide loans without land conversion made it ‘a necessary prerequisite’. The tribunal also noted that Doddi’s letters to GESCOM, though she did not specifically use the term ‘force majeure’, conveyed events beyond her control.

As to the tariff reduction, the tribunal remanded the matter back to KERC to ascertain if the capital cost of the project was crystallised before the original commissioning date of January 1, 2017. If yes, then the tariff of ₹8.40 per kWh would apply; otherwise, the tariff applicable on the actual commissioning date would be used. In other words, if Doddi had purchased equipment before the agreed date, then the tariffs would apply as per the agreement.

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Published on December 22, 2025