The Supreme Court held that a press release announcing a policy change does not constitute a “Change in Law” under a Power Purchase Agreement, as only duly promulgated notifications have legal force. It further ruled that deemed export benefits under the Foreign Trade Policy are inapplicable to immovable, integrated power plants, as the policy is designed for movable “goods” and requires strict adherence to defined supply and procurement conditions.
Facts Of The Case:
The case involved appeals by Nabha Power Limited and Talwandi Sabo Power Limited against the Punjab State Power Corporation Limited (PSPCL). The dispute arose from a Power Purchase Agreement (PPA) executed following a tariff-based competitive bidding process. The appellants claimed that post-bid notifications from the Directorate General of Foreign Trade (DGFT), which withdrew deemed export benefits under the Foreign Trade Policy (FTP), constituted a “Change in Law” event under Article 13 of the PPA. They argued these benefits, which included exemptions from customs and excise duties on capital goods, were legitimately available to their thermal power projects at the bid cut-off date and were factored into their financial calculations. The respondents, PSPCL, contended that the FTP benefits were never intended for immovable infrastructure like power plants and that the DGFT’s clarificatory notices did not amount to a legislative change. The case traversed through the Punjab State Electricity Regulatory Commission and the Appellate Tribunal for Electricity, both of which rejected the appellants’ claims, leading to the present appeals before the Supreme Court.
Procedural History:
The procedural history began with Nabha Power Limited filing Petition No. 30 of 2012 before the Punjab State Electricity Regulatory Commission (State Commission). The State Commission dismissed the petition, holding that the withdrawal of benefits did not constitute a “Change in Law” under the PPA. NPL then appealed to the Appellate Tribunal for Electricity (APTEL) in Appeal No. 29 of 2013. APTEL, in its first order, remanded the matter back to the State Commission for reconsideration. On remand, the State Commission reiterated its original findings in a second order. A subsequent appeal by NPL (Appeal No. 47 of 2015) and a connected appeal by Talwandi Sabo Power Limited (Appeal No. 32 of 2015) were heard together by APTEL, which upheld the State Commission’s order in a common impugned judgment dated July 4, 2017. This led to the filing of Civil Appeal Nos. 8694 and 8739 of 2017 before the Supreme Court of India, which ultimately dismissed the appeals and affirmed the APTEL’s judgment.
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Court Observation:
The Court made several key observations. It held that a press release or cabinet decision does not qualify as a “Change in Law,” which is strictly limited to duly enacted statutes or promulgated notifications. It observed that the Foreign Trade Policy’s deemed export benefits are designed exclusively for movable “goods” and cannot be extended to an immovable, integrated power plant, which fails the test of marketability and does not constitute “manufacture.” The Court further noted that the mandatory conditions for availing benefits—supply of goods by a contractor under International Competitive Bidding (ICB) and procurement as per FTP procedures—were not met. It concluded that the subsequent DGFT notifications were merely clarificatory of the existing law and did not effectuate any change warranting restitution under the PPA.
Final Decision & Judgement:
The Supreme Court dismissed the appeals, affirming the judgment of the Appellate Tribunal for Electricity. The Court held that the appellants were not entitled to deemed export benefits under the Foreign Trade Policy as an integrated power plant is not “goods” and its construction does not amount to “manufacture.” It further ruled that the press release and subsequent DGFT clarifications did not constitute a “Change in Law” under the Power Purchase Agreement, as only duly promulgated statutory notifications qualify. Consequently, the claim for restitutionary compensation was rejected, with no order as to costs.
Case Details:
Case Title: Nabha Power Limited vs Punjab State Power Corporation Limited and Others Citation: (2025) 5 SCC 353 Appeal Number: Civil Appeal No. 8694 of 2017 Date of Judgement: August 19, 2025 Judges/Justice Name: Justice B.R. Gavai & . Justice Augustine George Masih
Download The Judgement Here