Case Note & Summary
The Supreme Court dismissed an appeal filed by Jaipur Vidyut Vitran Nigam Ltd. and other Rajasthan Discoms against an order of the Appellate Tribunal for Electricity (APTEL). The dispute arose from a Power Purchase Agreement (PPA) dated 28.01.2010 between the Discoms and Adani Power Rajasthan Ltd. (the generator) for supply of 1200 MW at a levelized tariff of Rs.3.238 per unit. On 19.12.2017, Coal India Limited issued a notification imposing Evacuation Facility Charges (EFC) of Rs.50 per tonne, effective from 20.12.2017. The generator immediately informed the Discoms that this constituted a change in law event. When the Discoms did not respond, the generator filed a petition before the Rajasthan Electricity Regulatory Commission (RERC) under Section 86 of the Electricity Act, 2003. The RERC allowed some reliefs but rejected others. The generator appealed to the APTEL, which condoned a delay of 332 days in filing and 236 days in refiling. The APTEL, by judgment dated 18.04.2024, held that the notification amounted to a change in law and that the generator was entitled to compensation from the date of notification, with carrying cost at Late Payment Surcharge (LPS) rates on a compounding basis, except for the period of delay in filing the appeal. The Discoms appealed to the Supreme Court, which limited the scope to the interpretation of Articles 10.2.1 and 10.5.1(ii) of the PPA. The Discoms argued that the generator should have raised a supplementary bill earlier and that carrying cost at LPS was not warranted. The generator contended that the issues were covered by earlier Supreme Court decisions in GMR Warora Energy Ltd. v. CERC, UHBVNL v. Adani Power Ltd., and UHBVNL v. Adani Power (Mundra) Ltd. The Supreme Court held that the APTEL's order condoning delay had attained finality, and the issues regarding change in law and carrying cost were covered by the cited precedents. The Court found no merit in the appeal and dismissed it, upholding the APTEL's order.
Headnote
A) Electricity Law - Change in Law - Evacuation Facility Charges - Section 86, Electricity Act, 2003 - Notification by Coal India Limited imposing Evacuation Facility Charges constitutes a change in law event under the Power Purchase Agreement - The generator is entitled to compensation from the date of notification, and carrying cost at Late Payment Surcharge rates is payable from that date, subject to deduction for delay in filing appeal (Paras 3-7, 14-15). B) Electricity Law - Carrying Cost - Late Payment Surcharge - Section 111, Electricity Act, 2003 - Carrying cost at LPS rates can be awarded even without a supplementary bill being raised, as the liability to pay arises from the change in law event - The distinction between liability to pay and obligation to pay is not relevant when the change in law is established (Paras 9, 14-15). C) Electricity Law - Condonation of Delay - Section 111, Electricity Act, 2003 - The APTEL's order condoning delay in filing and refiling the appeal has attained finality as it was not challenged - The appellant cannot reagitate the issue of delay in the appeal before the Supreme Court (Paras 6, 8, 14-15). D) Electricity Law - Scope of Appeal - Section 111, Electricity Act, 2003 - The Supreme Court, while hearing an appeal under the Electricity Act, must confine itself to the issues raised and not reopen settled matters - The appeal was limited to interpretation of Articles 10.2.1 and 10.5.1(ii) of the PPA, and other issues are covered by earlier decisions (Paras 8, 12-15).
Issue of Consideration
Whether the APTEL correctly held that the notification dated 19.12.2017 imposing Evacuation Facility Charges constituted a change in law event entitling the respondent to compensation from the date of notification, and whether the grant of carrying cost at LPS rates was proper, particularly in light of the interpretation of Articles 10.2.1 and 10.5.1(ii) of the PPA.
Final Decision
The Supreme Court dismissed the appeal, upholding the APTEL's judgment dated 18.04.2024. The Court held that the issues regarding change in law and carrying cost are covered by earlier decisions, and the APTEL's order condoning delay has attained finality. The appeal was dismissed with no order as to costs.
Law Points
- Change in law event
- Evacuation Facility Charges
- carrying cost
- Late Payment Surcharge
- supplementary bill
- condonation of delay
- scope of appeal under Electricity Act
- 2003
