The Supreme Court upheld the Appellate Tribunal for Electricity’s (APTEL) ruling that a Coal India Limited (CIL) notification imposing Evacuation Facility Charges (EFC) constitutes a “change in law” event under the Power Purchase Agreement (PPA). The judgment affirmed that the power generator is entitled to compensation from the notification date with carrying cost at Late Payment Surcharge (LPS) rates on a compounding basis, based on restitutionary principles. The Court clarified that only a substantial question of law is appealable, and the supplementary bill is required only after due adjudication.
Facts Of The Case:
A Power Purchase Agreement (PPA) was signed on January 28, 2010, between Rajasthan Discoms and Adani Power Rajasthan Ltd. for 1200 MW. On December 19, 2017, Coal India Limited (CIL) imposed Evacuation Facility Charges (EFC), which Adani Power immediately notified as a “change in law” event. After no resolution, Adani Power petitioned the Rajasthan Electricity Regulatory Commission (RERC), and then appealed to the Appellate Tribunal for Electricity (APTEL) after RERC’s partial decision. APTEL, condoning significant delays, ruled on April 18, 2024, that the CIL notification was indeed a “change in law,” entitling Adani Power to compensation, including carrying costs at Late Payment Surcharge (LPS) rates from the notification date. The Supreme Court’s current appeal focused on specific PPA interpretations.
Procedural History:
A Power Purchase Agreement (PPA) between Rajasthan Discoms and Adani Power Rajasthan Ltd. led to a dispute when Coal India Limited (CIL) imposed Evacuation Facility Charges, which Adani Power asserted constituted a “change in law.” Consequently, Adani Power filed a petition before the Rajasthan Electricity Regulatory Commission (RERC), which partially granted and partially rejected their claims. Adani Power then appealed to the Appellate Tribunal for Electricity (APTEL), which, after condoning significant delays in filing, ruled in their favor on April 18, 2024, confirming the “change in law” and entitlement to compensation with Late Payment Surcharge (LPS). This decision was then challenged by Rajasthan Discoms in the current appeal before the Supreme Court.
READ ALSO : SARFAESI Act’s Section 11: Supreme Court Affirms Mandatory Arbitration for Financial Institutions
Court Observation:
The Supreme Court, in its observations, found no basis to interfere with the Appellate Tribunal for Electricity’s (APTEL) judgment, concluding that the appellants’ liability under the Power Purchase Agreement was correctly established. The Court explicitly rejected the argument that a supplementary bill was a prerequisite for payment or that its absence negated liability, noting that Adani Power had promptly notified the “change in law” event. Furthermore, the Court reiterated that the issue of carrying cost at Late Payment Surcharge (LPS) rates had been consistently addressed in prior judgments, rendering further deliberation academic. It also found the precedents cited by the appellants irrelevant to the case facts and noted that subsequent orders from RERC, post-APTEL’s remand, remained unchallenged. Ultimately, the Court found the appeal lacking merit and dismissed it.
Final Decision & Judgement:
The Supreme Court ultimately found no merit in the appeal filed by Jaipur Vidyut Vitran Nigam Ltd. & Ors., and consequently, the appeal was dismissed. The Court affirmed the Appellate Tribunal for Electricity’s (APTEL) impugned judgment, confirming that liability was correctly fastened upon the appellants under the Power Purchase Agreement. All pending applications, if any, were also disposed of.
Case Details:
Case Title: Jaipur Vidyut Vitran Nigam Ltd. & Ors. Versus Adani Power Rajasthan Ltd. & Anr. Citation: 2025 INSC 770 Appeal No.: Civil Appeal No. 4336 of 2025 Date Of Judgement:May 23, 2025 Judges/Justice Name: M. M. Sundresh
Download The Judgement Here