APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 842 OF 2023 & IA NO. 1826 OF 2024 Dated: 16^th April, 2025 Present: Hon’ble Mr. Justice Ramesh Ranganathan, Chairperson Hon’ble Ms. Seema Gupta, Technical Member (Electricity)

In the matter of:

ESSAR POWER GUJARAT LIMITED (EPGL)

Through its Authorized Signatory, G. Srikar Essar House 11, Keshavrao Khadye Marg Mahalaxmi, Mumbai – 400 034. … Appellant VERSUS

1. GUJARAT ELECTRICITY REGULATORY COMMISSION Through its Secretary

6^th Floor, Gift One, Road, 5C, Zone 5, Gift City, Gandhinagar 382355, Gujarat. … Respondent No.1

2. GUJARAT URJA VIKAS NIGAM LIMITED Through its Secretary Sardar Patel Vidyut Bhavan, Race Course Circle, Vadodara – 390007, Gujarat. … Respondent No.2 Counsel for the Appellant(s): Mahesh Agarwal Rishi Agarwala Rohan Talwar Shashwat Singh Counsel for the Respondent(s): Anand K. Ganesan Swapna Seshadri Kriti Soni Ashabari Basu Thakur Srishti Khindaria for Res.2 JUDGEMENT PER HON’BLE MR. JUSTICE RAMESH RANGANATHAN, CHAIRPERSON I. INTRODUCTION:

This Appeal is preferred against the order passed by the Gujarat Electricity Regulatory Commission (“GERC” for short) in Petition No. 1680 of 2017 dated 23.12.2019, and the order in Review Petition No. 1866 of 2020 dated 18.03.2023. The reliefs sought by the Appellant-Essar Power Gujarat Limited in the present Appeal are - (a) to set aside the order of the GERC in Petition No. 1680 of 2017 dated 23.12.2019 and the order in Review Petition No. 1866 of 2020 dated 18.03.2023; (b) direct the Respondent GUVNL to pay corresponding carrying cost on compounding basis in terms of the invoices dated 10.04.2023 on the principal amount of Change in Law compensation already granted by the GERC vide it Order in Review Petition No. 1866 of 2020, and to direct GUVNL to make payment in a time-bound manner; (c) to pay late payment surcharge to the Appellant in accordance with clause 11.3.5 of the PPA on the amounts set out in the invoices dated

10.04.2023 (from 09.06.2023 till the date of payment).

The short issue that arises for consideration, in the present appeal, is whether the Appellant Generator - Essar Power Gujarat Limited is entitled to carrying cost on the change in law (“CIL”) compensation, granted to it by the Gujarat Electricity Regulatory Commission (“GERC” for short), under Article 13 of the Power Purchase Agreement dated 26.02.2007 (“PPA” for short) executed by the Appellant with Respondent No. 2 - Gujarat Urja Vikas Nigam Limited (“GUVNL” for short), for the time period between when the change in law event arose and the decision of the GERC.

The Appellant was awarded change in law compensation by the.

GERC by its order in Petition No. 1680 of 2017 dated 23.12.2019, which was enhanced by the Review Order in Petition No. 1866 of 2020 dated 18.03.2023, for the adverse impact of the Integrated Goods & Services Tax Act, 2017 (“GST Act” for short) notified by the Government of India on

12.04.2017 which was implemented with effect from 01.07.2017.

The GERC held that the GST Act constituted a change in law event, and opined that the appellant was entitled to be compensated for such an event. The GERC awarded compensation to the appellant, for the change in law event, by its Order dated 23.12.2019 and its Review Order dated 18.03.2023. It is relevant to note that the Appellant did not earlier claim carrying cost on the change in law compensation which they had sought as arising as a result of introduction of GST, which new levy subsumed many of the taxes and duties previously applicable. It is for the first time, in the additional affidavit filed in the Review Petition on 17.09.2021, that the appellant claimed carrying cost for the period April. 2019 to March, 2021. The GERC, however, did not award carrying cost holding that the issue of interest was “raised subsequently and hence could not be allowed in the Review Petition”.

II. FACTS TO THE EXTENT RELEVANT:

The second Respondent-GUVNL published a Request for Qualific