Adani Power's appeal on compensation for coal shortage partially allowed

07 May 2024 8:19 AM

By: Admin

Adani Power (Mundra) Limited (AP(M)L) filed a petition claiming compensation for a change in the New Coal Distribution Policy, 2007. Haryana Utilities filed a counterclaim, stating that AP(M)L had not considered the benefits accruing to them on account of Inter Plant Transfer (IPT) permitted under a communication dated 19th June 2013 issued by Coal India Limited. CERC allowed compensation for certain 'Change in Law' events claimed by AP(M)L, but Haryana Utilities challenged this decision, which was rejected. APTEL, in its final judgment, held that 'Change in Law' compensation needs to be calculated as Assured Coal Quantity (ACQ) minus actual supply and that the communication dated 19th June 2013 was not a 'Change in Law.' Haryana Utilities filed an appeal, challenging the APTEL decision.

Supreme Court agreed to first decide two appeals based on three common issues related to the relief on account of NCDP 2013, computing 'Change in Law' relief, and the date from which compensation should be granted.

Supreme Court discusses the interpretation of the definition of "Law" in the Power Purchase Agreement (PPA) and a communication dated June 19, 2013, which allowed interplant transfer of coal. The Court held that the communication constituted a "Change in Law" event and that the Appellate Tribunal for Electricity (APTEL) erred in not recognizing it as such. The Court also noted that APTEL failed to consider that the decision on this issue would affect other DISCOMS, and that a contrary view was taken by the same tribunal in a later case.

Supreme Court held that the communication dated 19th June 2013 providing for interplant transfer of coal (IPT) amounts to 'Change in Law'. The Court also found that the cost savings made in the transportation of coal on account of IPT must be passed on to the appropriate DISCOMS and ultimately to the consumers. The matter was remitted to CERC for working out the effect of the Change in Law after giving notice to MSEDCL and Rajasthan DISCOMS and hearing all parties. The Court directed CERC to decide the issue and calculate the benefits that would be accruable to any of the parties within a period of six months from the date of the judgment.

UTTAR HARYANA BIJLI VITRAN NIGAM LIMITED AND ANOTHER VS ADANI POWER (MUNDRA) LIMITED