Late Payment Surcharge Claims Dismissed; Non-Meritorious Litigations Discouraged: Supreme Court
The Supreme Court of India, in a landmark judgment on March 18, 2024, dismissed the application by Adani Power Rajasthan Limited (APRL) seeking a Late Payment Surcharge (LPS) from Rajasthan Discoms under the Electricity Act, 2003. The bench comprising Justices Aniruddha Bose and Sanjay Kumar emphasized the importance of discouraging repetitive and non-meritorious litigation by imposing costs on APRL.
Legal Point of the Judgment:
The judgment addressed the legal point concerning the claim of LPS by APRL from Rajasthan Discoms, as per a Power Purchase Agreement dated 28.01.2010. The Court meticulously analyzed the interpretation of Article 8.3.5 of the PPA, especially in the light of the non-payment of LPS following a change in law clause.
Facts and Issues:
APRL’s claim for Rs. 1376.35 crore as LPS was grounded in the alleged shortage of domestic coal, compelling the use of costlier imported coal. The company claimed this as a ‘change in law’ situation under the PPA, warranting compensation for additional costs incurred.
Court’s Assessment:
The Court’s detailed assessment included a review of the specific clauses of the PPA and their application to the case. Previous findings by RERC, APTEL, and the Supreme Court were taken into account. The Court observed, “In the event of delay in payment of a Monthly Bill by the Procurers beyond its Due Date, a Late Payment Surcharge shall be payable by such Procurers to the Seller at the rate of two percent (2%) in excess of the applicable SBAR per annum…” However, it was concluded that the LPS issue had been satisfactorily resolved in the previous judgment, and there were no grounds for a new review or reinterpretation.
Decision:
The application filed by APRL seeking LPS was dismissed by the Supreme Court. The Court imposed costs of Rs. 50,000 on APRL to be remitted to the Supreme Court Legal Aid Committee, underlining the intent to deter similar non-meritorious litigations.
Date of Decision: March 18, 2024
Jaipur Vidyut Vitran Nigam Ltd. & Ors. Vs. Adani Power Rajasthan Ltd. & Anr.
