1. Compensation for Change in Law events — Fuel cost shortfall — Pro rata apportionment among multiple beneficiaries under Power Purchase Agreements — Electricity Act, 2003. (Para 1 )
Back
Next 
2025 Supreme(SC) 1649
SUPREME COURT OF INDIA
B.R.GAVAI, K. VINOD CHANDRAN, JJ.
Haryana Power Purchase Centre (HPPC) And Others – Appellants
Versus
GMR Kamalanga Energy Limited And Others – Respondents
Civil Appeal No. 1929 of 2020 With Civil Appeal No. 3429 of 2020
Decided On : 08-09-2025
Important Points
The court upheld that coal supply from power generation must be allocated equitably among all electricity distribution companies, as mandated by regulatory guidelines, rejecting attempts to prioritize specific agreements.
Subject
Electricity Law - Tariff Regulation
Act Referred
Headnote
(A) Electricity Act, 2003 - Sections 62 and 63 - Appeals against the judgment of Appellate Tribunal for Electricity and order of Central Electricity Regulatory Commission regarding power procurement and Change in Law - Dismissed due to lack of substantial question of law, affirming that coal supply must be allocated proportionally to all beneficiaries. (Paras 46, 20, 41)
(B) Regulatory Authority's Expertise - Courts should not interfere with determinations made by expert bodies unless there is manifest unreasonableness or illegality. (Paras 20, 19)
(C) Change in Law Claims - Determined based on proportional allocation of coal, not specific to individual Power Purchase Agreements. (Paras 38, 24)
Facts of the case:
Appeals were made by Haryana Utilities and GRIDCO challenging the APTEL's confirmation of CERC's orders related to an energy purchase agreement and associated costs due to changing legal circumstances affecting coal supply agreements.
Findings of Court:
Both appeals were found to lack merit based on concurrent findings that the institution required proportional distribution of energy costs across all agreements and endorsed the CERC's discretion in tariff adjustment matters.
Issues: The court addressed whether the appeals raised substantial questions of law regarding expert regulatory findings and the interpretation of coal supply agreements.
Ratio Decidendi: The court emphasized judicial restraint regarding the findings of expert bodies like the CERC, affirming the principle of proportional cost allocation among differing beneficiary agreements.
Result: Appeals dismissed.
(B) Regulatory Authority's Expertise - Courts should not interfere with determinations made by expert bodies unless there is manifest unreasonableness or illegality. (Paras 20, 19)
(C) Change in Law Claims - Determined based on proportional allocation of coal, not specific to individual Power Purchase Agreements. (Paras 38, 24)
Facts of the case:
Appeals were made by Haryana Utilities and GRIDCO challenging the APTEL's confirmation of CERC's orders related to an energy purchase agreement and associated costs due to changing legal circumstances affecting coal supply agreements.
Findings of Court:
Both appeals were found to lack merit based on concurrent findings that the institution required proportional distribution of energy costs across all agreements and endorsed the CERC's discretion in tariff adjustment matters.
Issues: The court addressed whether the appeals raised substantial questions of law regarding expert regulatory findings and the interpretation of coal supply agreements.
Ratio Decidendi: The court emphasized judicial restraint regarding the findings of expert bodies like the CERC, affirming the principle of proportional cost allocation among differing beneficiary agreements.
Result: Appeals dismissed.
Legal Category Hierarchy
- energy law
- administrative law
Advocates appeared:
For Appellant(s) : In CA. 1929/20 also for RR.2 to 4 in CA. 3429/20 : Mr. M.G. Ramachandran, Sr. Adv. Mr. C. Aryama Sundaram, Sr. Adv. Ms. Poorva Saigal, Adv. Mr. Shubham Arya, Adv. Mr. Nikunj Dayal, AOR Ms. Pallavi Saigal, Adv. Mr. Abhishek Gupta, Adv. Mr. Harshwardhan Singh, Adv.
In CA. 3429/20 : Mr. Raj Kumar Mehta, AOR Ms. Himanshi Andley, Adv.
For Respondent(s): R1 in CA.1929/20 : Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Damma Seshadri Naidu, Sr. Adv. Mr. Vishrov Mukerjee, Adv. Mr. Pukhrambam Ramesh Kumar, AOR Mr. Yashaswi Kant, Adv. Ms. Juhi Senguttuvan, Adv. Ms. Priyanka Vyas, Adv. Mr. L. Nidhiram Sharma, Adv. Mr. Avishkar Singhvi, Adv. Mr. Karun Sharma, Adv. Ms. Rajkumari Divyasana, Adv.
R1 in CA.3429/20 : Mr. Vishrov Mukerjee, Adv. Mr. Pukhrambam Ramesh Kumar, AOR Mr. Yashaswi Kant, Adv. Ms. Juhi Senguttuvan, Adv. Ms. Priyanka Vyas, Adv. Mr. L. Nidhiram Sharma, Adv. Mr. Avishkar Singhvi, Adv. Mr. Karun Sharma, Adv. Ms. Rajkumari Divyasana, Adv.
R2 in CA.1929/20 & R6 in CA.3429/20 : Ms. Prerna Singh, Adv. Mr. Ravi Kishore, Adv. Mr. Guntur Prabhakar, AOR
R4 in CA.1929/20 : Mr. Raj Kumar Mehta, AOR Ms. Himanshi Andley, Adv.
R5 in CA.1929/20 : Mr. S.B. Upadhyay, Sr. Adv. Mr. Nishant Kumar, Adv. Mr. Abhinav Kathulia, Adv. Ms. Anisha Upadhyay, AOR
For Appellant(s) : In CA. 1929/20 also for RR.2 to 4 in CA. 3429/20 : Mr. M.G. Ramachandran, Sr. Adv. Mr. C. Aryama Sundaram, Sr. Adv. Ms. Poorva Saigal, Adv. Mr. Shubham Arya, Adv. Mr. Nikunj Dayal, AOR Ms. Pallavi Saigal, Adv. Mr. Abhishek Gupta, Adv. Mr. Harshwardhan Singh, Adv.
In CA. 3429/20 : Mr. Raj Kumar Mehta, AOR Ms. Himanshi Andley, Adv.
For Respondent(s): R1 in CA.1929/20 : Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Damma Seshadri Naidu, Sr. Adv. Mr. Vishrov Mukerjee, Adv. Mr. Pukhrambam Ramesh Kumar, AOR Mr. Yashaswi Kant, Adv. Ms. Juhi Senguttuvan, Adv. Ms. Priyanka Vyas, Adv. Mr. L. Nidhiram Sharma, Adv. Mr. Avishkar Singhvi, Adv. Mr. Karun Sharma, Adv. Ms. Rajkumari Divyasana, Adv.
R1 in CA.3429/20 : Mr. Vishrov Mukerjee, Adv. Mr. Pukhrambam Ramesh Kumar, AOR Mr. Yashaswi Kant, Adv. Ms. Juhi Senguttuvan, Adv. Ms. Priyanka Vyas, Adv. Mr. L. Nidhiram Sharma, Adv. Mr. Avishkar Singhvi, Adv. Mr. Karun Sharma, Adv. Ms. Rajkumari Divyasana, Adv.
R2 in CA.1929/20 & R6 in CA.3429/20 : Ms. Prerna Singh, Adv. Mr. Ravi Kishore, Adv. Mr. Guntur Prabhakar, AOR
R4 in CA.1929/20 : Mr. Raj Kumar Mehta, AOR Ms. Himanshi Andley, Adv.
R5 in CA.1929/20 : Mr. S.B. Upadhyay, Sr. Adv. Mr. Nishant Kumar, Adv. Mr. Abhinav Kathulia, Adv. Ms. Anisha Upadhyay, AOR
Table of Contents
2. Fuel linkage specificity — Whether coal allocation is PPA-specific or for the entire plant — Apportionment of additional fuel costs among multiple distribution licensees. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 )
3. Deference to expert bodies' factual findings — Fuel allocation for the entire plant necessitates pro rata cost sharing — Prohibition against approbation and reprobation regarding tariff methodology. (Para 19 , 20 , 21 , 22 , 23 , 24 , 31 , 32 , 33 , 34 , 35 , 37 , 38 , 39 , 41 , 42 , 43 , 44 )
4. Coal linkage allocated for a power plant as a whole must be apportioned pro rata among all beneficiaries to avoid cross-subsidization and ensure equitable cost distribution. (Para 33 , 45 )
5. Appeals dismissed — Concurrent orders of the regulatory commission and appellate tribunal upholding pro rata apportionment of fuel costs affirmed. (Para 46 )
6. What is the scope of an appeal to the Supreme Court under Section 125 of the Electricity Act, 2003?
Appeals under Section 125 are tenable only on the grounds available under Section 100 of the Code of Civil Procedure, 1908, meaning they are permissible only if a substantial question of law arises. (Para 18 , 23 )
7. To what extent will courts interfere with the findings of expert bodies like CERC and APTEL?
Courts are slow to interfere with concurrent findings of expert bodies unless the decisions are ex facie arbitrary, illegal, based on extraneous considerations, or fail to consider mandatory statutory provisions. (Para 19 , 20 , 24 )
8. How should fuel linkage and associated costs be apportioned when a power plant serves multiple beneficiaries?
When coal linkage is allocated for the power plant as a whole, the coal and the costs of procurement from alternate sources to meet shortfalls must be apportioned pro rata among all beneficiaries. (Para 32 , 33 , 45 )
9. Can a party challenge a tariff methodology after previously accepting it before the regulatory commission?
No, a party cannot indulge in approbation and reprobation by accepting a methodology during proceedings and subsequently challenging it after final orders are passed. (Para 37 , 39 )
10. Is a beneficiary under a Section 62 PPA a necessary party to Change in Law proceedings concerning Section 63 PPAs?
Not necessarily, as proceedings under Section 62 (cost-plus tariff) and Section 63 (competitive bidding) are entirely different, and a party is not necessarily required if their specific tariff regime is distinct. (Para 41 , 42 , 43 )
JUDGMENT
B.R.GAVAI, CJI.
FACTUAL ASPECTS
1. These appeals take exception to the judgment and final order dated 20th December 2019 passed by the Appellate Tribunal for Electricity, New Delhi [Hereinafter referred to as the ‘APTEL’] in Appeal No. 135 of 2018 along with Appeal No. 54 of 2019, whereby the learned APTEL dismissed the said appeals and upheld the order dated 20th March 2018 passed by the Central Electricity Regulatory Commission, New Delhi [Hereinafter referred to as the ‘CERC’] in Petition No. 105/MP/2017 [Hereinafter referred to as ‘Petition No. 105’].
2. We have two appeals before us, both of which challenge the same judgment and final order of the learned APTEL. The first appeal being Civil Appeal No. 1929 of 2020 has been filed by Haryana Power Purchase Centre and two others [Hereinafter referred to as the ‘HPCC’] whereas the second appeal being Civil Appeal No. 3429 of 2020 has been filed by one GRID Corporation of Orissa Limited [Hereinafter referred to as ‘GRIDCO’]. For the sake of clarity and to avoid any confusion, the parties will be referred to according to their positions in the first of the two civil appeals.
3. Before we proceed with the facts of the case, it would be apposite to give a brief overview of the parties before us.
3.1 HPCC (Appellant No.1) is the nodal agency for the procurement of power on behalf of the distribution licensees in the State of Haryana, being Dakshin Haryana Bijli Vitran Nigam Limited (Appellant No.2) and Uttar Haryana Bijli Vitran Nigam Limited (Appellant No.3). Haryana Power Generation Corporation Limited (Proforma Respondent No.6) is the body corporate that was responsible for the initiation of the competitive bid process on behalf of Appellant Nos. 2 and 3 for procurement of power in the State of Haryana. Together, the said parties may be referred to as the “Haryana Utilities”.
3.2 GMR Kamalanga Energy Limited [Hereinafter referred to as ‘GKEL’] (Respondent No.1) is a generating company within the meaning of the ELECTRICITY ACT , 2003 [Hereinafter referred to as the ‘2003 Act’]. Notably, GKEL is a special purpose vehicle of GMR Energy Limited [Hereinafter referred to as ‘GEL’] which was the predecessor-in-interest of the Respondent No.1.
3.3 PTC India Limited [Hereinafter referred to as ‘PTC’] (Respondent No.2) is a trading licensee within the meaning of the 2003 Act. Respondent No. 2 had an arrangement with GKEL for the procurement of power.
3.4 CERC (Respondent No.3) is the regulatory commission under the 2003 Act.
3.5 GRIDCO (Respondent No.4) is a licensee under the 2003 Act which is responsible for procuring power for supply within the State of Odisha.
3.6 Similarly, Bihar State Power (Holding) Company [Hereinafter referred to as ‘Bihar Utilities’] (Respondent No.5) is a licensee under the 2003 Act which is responsible for procuring power for supply within the State of Bihar.
4. Having given a brief overview of the parties in the civil appeals, we may now proceed to examine the facts which lead to the present appeals. The facts are as follows:-
4.1 With the intention to set up a thermal power plant of about 1,000 MW comprising of two units of about 500 MW each at village Kamalanga, Dhenkanal in the State of Odisha, GEL entered into a Memorandum of Understanding (MoU) with the Government of Odisha on 9th June 2006. Per the terms of the MoU, the power project as envisaged was to operate with coal as the primary fuel, for which purpose the State of Odisha was to either allot coal blocks upon receipt of sanction from the Government of India or allot long-term coal linkage of such quality and quantity as required for the project. The MoU further necessitated that a nominated agency authorized by the Government of Odisha would have the right to purchase up to 25% of power sent out from the thermal power plants. While initially, the MoU envisaged the setting up of thermal plants with an aggregate capacity of 1,000 MW (500 x 2), by way of alteration carried out subsequently, it was decid
