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SURYA KANT, B. V. NAGARATHNA, JOYMALYA BAGCHI
West Bengal State Electricity Distribution Co. Ltd. – Appellant
Versus
Adhunik Power & Natural Resource Ltd. – Respondent
Facts of the Case:
On 05.01.2011, a Power Supply Agreement (PSA) was executed between West Bengal State Electricity Distribution Company Ltd. (WBSEDCL) and PTC India Limited (PTC) for supply of 100 MW of power for 25 years. (!) As a back-to-back arrangement, a Power Purchase Agreement (PPA) was executed on 25.03.2011 between Adhunik Power and Natural Resources Ltd. (APNRL) and PTC for onward sale of the power to WBSEDCL. (!) The West Bengal Electricity Regulatory Commission approved the PPA/PSA on 15.12.2011. (!)
Minutes of a meeting dated 03.01.2011, convened for negotiation of rates and finalization of the PPA, recorded that APNRL had a captive coal block at Ganeshpur, Jharkhand, in joint venture with Tata Steel Ltd. (TISCO). (!) (!) Subsequent to execution of the PPA/PSA, WBSEDCL issued a letter dated 30.04.2012 enquiring about the status of coal lifting and transportation from the Ganeshpur captive coal block. (!) (!) (!) (!)
Article 2.5 of the PPA/PSA provided that coal sourced from other than the captive source would be deemed sourced from the captive source, with no separate escalation in escalable energy charges. (!) Article 10 defined "Change in Law" events entitling compensation to restore the affected party to its pre-event economic position.[p_8 to p_22]
The Ganeshpur captive coal block was not operationalized. (!) APNRL sourced coal under tapering linkage from Central Coalfields Ltd. (CCL) and met shortfalls through e-auction and imports, commencing power supply to WBSEDCL via PTC. (!) APNRL sought pass-through of additional coal costs from PTC/WBSEDCL, which was denied citing Article 2.5. (!)
Cancellation of the coal block and subsequent legislative changes affected APNRL's coal procurement, leading to claims under Article 10 as Change in Law events. (!) (!) APNRL filed Petition No. 305/MP/2015 before the Central Electricity Regulatory Commission (CERC) on 25.10.2017 seeking pass-through of actual fuel costs. (!)
CERC, by order dated 29.01.2020, held Article 2.5 applicable only post-operationalization of the captive block; allowed compensation for e-auction/import coal to meet tapering linkage shortfall; rejected Change in Law claim for block cancellation and related events; directed a fresh petition for shortfall details. (!)
APNRL and WBSEDCL appealed to the Appellate Tribunal for Electricity (APTEL). By order dated 04.09.2025, APTEL upheld compensation for e-auction/import coal shortfall; reversed CERC on Change in Law (block cancellation and Coal Mines (Special Provisions) Act, 2015), holding it covered under Articles 10.1.1(b) and 10.1.1(f); remanded to CERC for compensation from 25.08.2014 with carrying costs. (!) (!)
JUDGMENT
Joymalya Bagchi, J.
1. The appeals are directed against the judgment and order dated 04.09.2025 whereby the Appellate Tribunal for Electricity (‘APTEL’) modified the order dated 29.01.2020 passed by the Central Electricity Regulatory Commission, New Delhi (‘CERC’) and directed that Respondent No.1, Adhunik Power and Natural Resources Ltd. (‘APNRL’), was entitled to (i) compensation for coal purchased through e- auction/import to meet the shortfall in tapering linkage granted to it pending operationalization of the Ganeshpur captive coal block, and (ii) compensation on account of Change in Law events with effect from 25.08.2014 as per Article 10.2 of the PPA1 [Power Purchase Agreement]/PSA2[ Power Supply Agreement], along with carrying costs till actual payment was made.
2. On 05.01.2011, a PSA was executed between the Appellant, West Bengal State Electricity Distribution Company Ltd. (‘WBSEDCL’) and Respondent No. 3, PTC India Limited3[ An inter-state trader of electricity] (‘PTC’) for supply of 100 MW of power for a period of 25 years.
3. As a back-to-back arrangement on 25.03.2011, a PPA was executed between APNRL and PTC for onward sale of 100 MW of power to WBSEDCL.
4. The
Manohar Lal Sharma VS Principal Secretary - 2014 6 Supreme 1: No keywords or phrases (e.g., "followed", "distinguished", "criticized", "questioned", "overruled", "reversed", "abrogated") indicating judicial treatment by subsequent decisions are present. The provided bullet points describe key holdings and principles from the case itself (e.g., interpretations of the CMNN Act, constitutional entries, statutory requirements, and findings of arbitrariness/illegality in coal block allocations), with no reference to how the case has been treated later. Treatment is therefore unclear and ambiguous based on the information provided.
Written contract – Ordinarily, when a contract is reduced to writing, its terms must be determined from the document itself – However, this rule does not put embargo on looking into such facts which ....
Definition of “Law” is wide enough to include all rules, regulations, orders, notifications by Governmental instrumentalities.
Expert bodies' decisions should not be interfered with unless they violate statutory provisions or are arbitrary.
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.
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 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 prioritiz....
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