SC upholds APTEL verdict in Adani Power case, rejects Rajasthan discoms plea

New Delhi, May 23 (PTI) The Supreme Court on Friday dismissed an appeal filed by Rajasthan’s power distribution companies against a judgement of the Appellate Tribunal for Electricity (APTEL) that had ruled in favour of the Adani Power Rajasthan Ltd (APRL).

A bench comprising Justices M M Sundresh and Rajesh Bindal held that there was no merit in the plea of Jaipur Vidyut Vitran Nigam Ltd (JVVNL) and Rajasthan Discoms.

It upheld the APTEL’s finding that a levy introduced by Coal India Limited constituted a “change in law” entitling Adani to compensation under its Power Purchase Agreement (PPA).

The case revolved around a December 2017 notification issued by Coal India Limited (CIL), imposing a charge of Rs 50 per tonne as evacuation facility charges (EFC).

Adani Power, which had signed a PPA with the Rajasthan Discoms in 2010 for the supply of 1200 MW of power, claimed that this levy constituted a “change in law” under Article 10 of the PPA.

Immediately after the issuance of the CIL notification on December 19, 2017, Adani Power notified the Discoms of the change in law event, seeking compensation.

When state discoms failed to respond adequately, Adani approached the Rajasthan Electricity Regulatory Commission (RERC), which partially allowed its claims.

Both parties subsequently approached APTEL, which in April 2024 ruled in favour of Adani Power.

Justice Sundresh, writing a 32-page judgement for the bench, said the introduction of a new statutory levy by a governmental entity like CIL qualified as a change in law, triggering the restitution principle enshrined in the PPA.

The verdict said that compensation must be provided to restore the power generator to the same economic position it would have occupied but for the change in law.

“We find no merit in this appeal. The appeal stands dismissed accordingly,” it held.

The APTEL held that the Adani firm, APRL, would be entitled for the benefit of the change in law event on account of evacuation facility charges from the date on which the notification, issued by Coal India Limited, was made applicable to them. PTI SJK SJK AMK AMK