The Supreme Court of India has dismissed an appeal filed by Rajasthan’s power distribution companies, including Jaipur Vidyut Vitran Nigam Ltd (JVVNL), against a ruling by the Appellate Tribunal for Electricity (APTEL) in favor of Adani Power Rajasthan Ltd. The tribunal had ordered the distribution companies to pay Adani Power around ₹186 crore in compensation. The Supreme Court upheld APTEL’s decision, stating that it found no merit in the appeals filed by the discoms.
The dispute began in 2017 when Coal India Ltd (CIL) introduced an Evacuation Facility Charge to cover the expenses related to transporting coal from the mine to the destination. Adani Power, which had entered into a Power Purchase Agreement (PPA) to supply 1,200 MW of power to Rajasthan discoms, argued that this charge was a sudden change in law and increased its cost of generating electricity. Adani Power claimed that it was entitled to receive compensation as per the provisions of the PPA, which protected it from financial losses due to new or modified laws, rules, or charges imposed by the government.
The Rajasthan Electricity Regulatory Commission partially allowed Adani Power’s claim, leading to appeals from both Adani Power and the state discoms to APTEL. The tribunal held that the new charge levied by CIL was a statutory levy imposed by a government entity, qualifying as a change-in-law event, and therefore, Adani Power was entitled to compensation. The Supreme Court agreed with the tribunal’s ruling, stating that the introduction of the Evacuation Facility Charge disrupted the economic basis of the PPA and activated the principle of restitution.
The court noted that the new statutory levy by a government body like CIL qualifies as a change in law, entitling Adani Power to be restored to the same economic position as if the change had not occurred. The Supreme Court also upheld the tribunal’s direction that compensation to Adani Power should be paid from the date of the CIL notification, along with carrying costs at Late Payment Surcharge rates specified in the PPA. As a result, the discoms will now have to pay ₹186 crore to Adani Power in dues. The Supreme Court’s decision brings an end to the long-standing dispute between Adani Power and the Rajasthan discoms, with the court ruling in favor of Adani Power’s claim for compensation due to the change in law.