A notification or order by an Indian Governmental Instrumentality can constitute a 'Change in Law' event under a Power Purchase Agreement if it impacts contractual obligations.

JUDGMENT :

B.R. GAVAI, J.

1. The present appeals challenge the judgment and order dated 5th October 2020 passed by the Appellate Tribunal for Electricity (hereinafter referred to as ‘APTEL’), in cross appeals being Appeal No. 340 of 2019, filed by Maharashtra State Electricity Distribution Company Limited (hereinafter referred to as ‘MSEDCL’), the appellant herein, and Appeal No. 354 of 2019, filed by Adani Power Maharashtra Limited (hereinafter referred to as ‘APML’), respondent No. 1 herein, thereby challenging the order dated 6th September 2019, passed by Maharashtra Electricity Regulatory Commission (hereinafter referred to as ‘MERC’).

2. APML and MSEDCL had entered into four long term Power Project Agreements (hereinafter referred to as ‘PPA’) dated (a) 8th September, 2008 for 1230 MW (hereinafter referred to as ‘1230 MW PPA’); (b) 21st March, 2010 for 1200 MW (hereinafter referred to as ‘1200 MW PPA’); (c) 9th August, 2010 for 120 MW (hereinafter referred to as ‘120 MW PPA’) and (d)16th February, 2013 for 440 MW (hereinafter referred to as ‘440 MW PPA’), pursuant to the competitive bidding process conducted by MSEDCL.

3. Prior to the signing of the PPAs between the parties, APML had applied to the Ministry of Coal, Government of India (for short, “MoC”) for allotment of Lohara Coal Blocks on 10th January 2007. Thereafter, on 6th November 2007, the MoC issued a Letter of Allocation (LoA) to APML conveying the allocation of Lohara (West) and Lohara Extension (E) Coal Blocks as the allocated source of fuel. Subsequently, on 23rd November 2007, APML applied to the Standing Linkage Committee (Long-Term) (hereinafter referred to as “SLC (LT)”) for grant of coal linkage for balance capacity to cover the coal requirement of Units 1, 2 and 3 of the Tiroda Thermal Power Station (TPS).

4. On 27th December 2007, the Government of Maharashtra issued a statutory Notification under Section 38 (V) of the Wild Life (Protection) Act, 1972, classifying 625.82 sq. km. of the Tadoba National Park and Andheri Wildlife Sanctuary as a Critical Tiger Habitat (CTH). It is pertinent to note that, at this point in time, the area demarcating the CTH, did not include the area of Lohara Coal Blocks and as such, there were no restrictions on coal mining in the allotted mining lease area. As per the revised Request for Proposal (RFP), the bid deadline was 21st February 2008 and the cut-off date was 14th February 2008, being seven days before the deadline. APML submitted its bid for supply of 1320 MW Power to MSEDCL, wherein it specified that the fuel source for a portion of the contracted capacity, viz. 800 MW capacity out of 1320 MW, would be the Lohara Coal Blocks. A copy of the MoC’s allocation letter dated 6th November 2007 was appended to the bid, as per the bid requirements.

5. Thereafter, on 21st February 2008, i.e., seven days after the bid cut-off date, the Conservator of the Tadoba Andheri Tiger Reserve (for short, “TATR”) approved the constitution of an Expert Committee for the creation of a Buffer Zone surrounding the core area of TATR under Section 38(V) of the Wildlife (Protection) Act.

6. Twenty-four days after the bid cut-off date, the Conservator, TATR submitted a proposal to the Chief Conservator of Forest, Maharashtra for creation of the aforesaid Buffer Zone. During the pendency of this proposal, the Ministry of Environment, Forests and Climate Change, Government of India (for short, “MoEF”), in exercise of its powers in terms of Regulation 7 of MoEF’s Notification dated 14th September 2006, granted the Terms of Reference (ToR), to APML for mining in the Lohara Coal Blocks, on the basis of the recommendation made by the Expert Appraisal Committee, MoEF (for short, “EAC”) in its 21st Meeting.

7. Thereafter, the 1320 MW PPA was executed between the parties on 8th September 2008, for supply of the contracted capacity from Units 2 and 3 of the Tiroda TPS. In pursuance of APML’s application for coal linkage, the SLC(LT) issued a Letter of