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SUPREME COURT OF INDIA
M. M. Sundresh, Rajesh Bindal, JJ.
Jaipur Vidyut Vitran Nigam Ltd. & Ors. – Appellants
Versus
Adani Power Rajasthan Ltd. & Anr. – Respondents
Civil Appeal No. 4336 of 2025 (Arising out of Civil Appeal Diary No. 26876 of 2024)
Decided On : 23-05-2025
JUDGMENT :
M. M. Sundresh, J.
1. Admit.
2. We have heard the learned Senior Counsel, Mr. Shyam Divan and learned Counsel, Mr. Karthik Seth appearing for the appellants and the learned Senior Counsel, Dr. Abhishek Manu Singhvi appearing for the respondent No. 1, at length. All the relevant documents, including the written submissions of the parties, have been perused.
3. In pursuance of the Letter of Intent issued to Adani Power Rajasthan Ltd. (respondent No.1-Power Generator), on 17.12.2009, a Power Purchase Agreement (hereinafter referred to as the “PPA”) dated 28.01.2010 was entered into between appellant Nos.1, 2 and 3, who are the Rajasthan Discoms engaged in the distribution and supply of electricity, on one side and respondent No.1 on the other, for the supply of 1200 MW Aggregate Contracted Capacity at a levelized tariff of Rs.3.238 per unit. The same was duly approved by respondent No.2.
4. While the agreement was in operation, a Notification came to be issued at the instance of M/s. Coal India Limited (hereinafter referred to as “CIL”), dated 19.12.2017, imposing a levy of Evacuation Facility Charges (hereinafter referred to as the “EFC”) with effect from 20.12.2017. Immediately, on the very next day i.e. 20.12.2017, respondent No.1 informed appellant No. 4 that the Notification dated 19.12.2017 constituted a ‘change in law’ event. The Notification dated 19.12.2017 is extracted below:
| “COAL INDIA LIMITED A Maharatna Company (A Govt. of India Enterprise) COAL BHAWAN Sales & Marketing Division Ground & Floor, Premises No, 04 MAR, Plot No. AF-III, Action Area -1A Rajarhat, New Town, Kolkata - 700156 Phone: 033-71104143, Fax: 033-23244229, Website: ……………………………… CIN: L23 L09WB1973GO1028844 |
| PRICE NOTIFICATION: CIL:S&M: GM(F)Pricing 2017/ 1005 dated 19th Dec. 2017 |
| Charge of Rs. 50 (Fifty) per tonne shall be levied as ‘Evacuation Facility Charges’ on all despatches except despatch through rapid loading arrangement. This is effective from 00:00 hour of 20" Dec. 2017. This issues with the approval of the competent authority. |
| General Manager (M&S) Marketing & Sales” |
5. On its failure in eliciting a suitable reply, respondent No.1 filed a Petition bearing No.1373/2018 before the Rajasthan Electricity Regulatory Commission (hereinafter referred to as the “RERC”), invoking Section 86 of the Electricity Act, 2003 (hereinafter referred to as the “2003 Act”) read with Article 10 of the PPA. While rejecting some of the reliefs, the RERC did allow some of the other prayers sought for by respondent No.1. Against the refusal of some of the claims, the respondent No. 1 filed an appeal before the Appellate Tribunal for Electricity (hereinafter referred to as the “APTEL”).
6. The appeal under Section 111 of the 2003 Act was so made along with an application seeking condonation of delay of 332 days in filing. Another application was filed seeking to condone the delay of 236 days in re-filing the appeal. Upon hearing both sides, the aforesaid applications were allowed and, thereafter, the appeal was decided on merits. It is pertinent to note that the common order by the APTEL, dated 23.01.2023, condoning the delay on both counts, has attained finality for want of further challenge.
7. The APTEL, inter alia, held by its judgment dated 18.04.2024, after elaborately considering the submissions made by both sides, that the Notification dated 19.12.2017 would amount to a change in law, and the respondent No. 1 would be entitled to the grant of compensation from the date of the Notification, by taking note of the decision rendered by this Court in GMR Warora Energy Ltd. v. CERC (2023) 10 SCC 401 (hereinafter referred to as “GMR Warora”) which, in turn, also placed reliance upon the earlier decisions of this Court. While doing so, it also took into consideration, the fair submission made on behalf of the appellants that the principal issue of levy of EFC, and consequently,
The Notification imposing Evacuation Facility Charges constitutes a change in law, entitling the affected party to compensation from that date.
The term “Law” in the PPAs would include all applicable rules, regulations, orders, Notifications issued by an Indian Governmental Instrumentality and shall also include all rules, regulations, decis....
The central legal point established in the judgment is the entitlement to compound interest on carrying cost under the restitutionary principle of the PPAs, emphasizing the aim of restituting the aff....
(1) Condition precedent for entertaining appeal under Section 125 of Electricity Act, 2003 is existence of a substantial question – A question of law which arises incidentally or collaterally and has....
Carrying Cost is compensable for Change in Law events, and the affected party must be restored to its original economic position, supporting claims for compound interest.
Railway electrification mandates post-cut-off qualify as Change in Law under PPAs, allowing cost recovery with carrying cost; water rate increases do not, being input costs. Limitation from cost crys....
Definition of “Law” is wide enough to include all rules, regulations, orders, notifications by Governmental instrumentalities.
Any change resulting in a cost impact on selling electricity constitutes a Change in Law event, entitling affected parties to compensation under PPAs.
Increases in GST and Basic Custom Duty on solar project inputs post-PUA signing qualify as Change in Law events entitling compensation via annuity payments at normative loan rates, with carrying cost....
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