GUJARAT URJA VIKAS NIGAM LIMITEDversusESSAR POWER LIMITED AND ANOTHER

                [2025] 9 S.C.R. 1575 : 2025 INSC 1160

                  Gujarat Urja Vikas Nigam Limited
                                  v.
                  Essar Power Limited and Another
                  (Civil Appeal No(s). 6581-6582 of 2025)
                             25 September 2025
               [Sanjay Kumar* and Alok Aradhe, JJ.]


                           Issue for Consideration
       Whether the appellant-GUVNL is entitled to reimbursement of
       the fixed charges, in relation to the diverted electricity from out
       of its allocated share by Essar Power Limited (EPL) to its sister
       company-Essar Steel Limited (ESL), in addition to the compensation
       payable for such wrongful diversion.

                                  Headnotes†
       Electricity – Proportionate principle of allocation –
       Reimbursement of fixed charges in relation to the diverted
       electricity – Predecessor-in-interest of GUVNL-Gujarat
       Electricity Board (GEB), entered into a PPA with EPL for
       purchase of the electricity generated by EPL – Total installed
       capacity of EPL’s plant was 515 MW and 300 MW thereof was
       to be supplied to GEB under the PPA – EPL entered into a
       separate PPA with its sister company-ESL, for sale and supply
       of the remaining 215 MW – However, in breach of the agreed
       proportionate shares in the electricity generated by it, EPL
       started supplying more power to its sister company-ESL,
       from out of the allocated share of GEB – In earlier rounds
       of litigation, issue of diversion of its allocated electricity
       along with the consequences thereof was raised by GUVNL
       in Gujarat Urja Vikas Nigam Limited v. Essar Power Limited
       [2016] 5 SCR 101 (relied on by both the parties herein) wherein
       interpreting the PPA to determine whether there was obligation
       to declare availability of power in a particular proportion, this
       Court inter alia held that EPL was under obligation as per PPA
       to declare weekly schedule of capacity available and that it
       shall not divert any power to its sister concern in a manner
       contrary to the proportionate principle; and that GERC was


* Author
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    right in holding that once the entire capacity was allocated
    in two parts in a particular proportion, EPL was not right
    in selling power to its sister concern beyond the allocated
    capacity; APTEL’s judgment was set aside and GERC’s order
    was restored – As GERC had left the actual working out of
    the loss suffered by GUVNL to be worked out separately
    and, on that basis, GUVNL had already filed a petition, it was
    directed that the same could be revived and considered in
    the light of its findings – Petition was disposed of by GERC
    vide order dtd.27.12.2019 – GUVNL and EPL assailed GERC’s
    order before APTEL, which was disposed of by the impugned
    order dtd.21.03.2025 – Finding of GERC and the APTEL that
    GUVNL is not entitled to reimbursement of fixed charges, if,
    sustainable – GUVNL, if entitled to reimbursement of the fixed
    charges, in relation to the diverted electricity from out of its
    allocated share, in addition to the compensation payable for
    such wrongful diversion – Total amount that can be claimed
    by GUVNL for the electricity diverted by EPL to ESL from out
    of its allocated share, that is, 58% of the available electricity
    for the entire plant declared on a weekly basis:
    Held: 1.1 Disjointed reading of specific paragraphs or even
    sentences of Gujarat Urja Vikas Nigam Limited v. Essar Power
    Limited [2016] 5 SCR 101, out of context, would not be the proper
    approach to understand the import of the decision – It must be
    read as a whole and in its entirety to glean the findings and ratio
    decidendi laid down therein. [Paras 12, 14-16, 20-23]
    1.2 In the light of para 9.13 in GERC’s order dated 18.02.2009
    which was affirmed by this Court in the earlier round, it is not
    open to GUVNL to agitate its claim for compensation beyond what
    was determined as just and acceptable in the said para and was
    accepted and confirmed by this Court, while restoring the order
    of GERC. [Para 29]
    1.3 The issue before this Court is as to the total amount that can be
    claimed by GUVNL for the electricity diverted by EPL to ESL from
    out of its allocated share, that is, 58% of the available electricity for
    the entire plant declared on a weekly basis – ‘Compensation’ could
    only be claimed by GUVNL for such wrongful diversion by EPL on
    the basis of HTP–1 Tariff Energy Charge, as this was what was
    found to be an appropriate method for computing compensation on
    the basis of the earlier settlement arrived at by and between the
[2025] 9 S.C.R.                                                                1577

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     parties for the period April, 1998 to September, 2004 – However,
     neither GERC nor the APTEL took note of what was stated earlier
     by this Court and GERC with regard to ‘reimbursement’ of fixed
     charges. [Para 31]
     1.4 The finding of GERC and the APTEL that GUVNL is not entitled
     to reimbursement of fixed charges is unsustainable – Once GUVNL
     did not receive the electricity for which such fixed charges had
     been computed and paid on a monthly basis, it was entitled to
     reimbursement thereof, not as compensation, but on the principle
     of restitution as such payment was not at all due from it – GUVNL
     was entitled to reimbursement of the fixed charges, in relation to
     the diverted electricity from out of its allocated share, in addition to
     the compensation payable for such wrongful diversion, computed
     on the basis of HTP-1 Tariff Energy Charge. [Para 38]
     1.5 As regards the computation of the electricity diversion being
     made on hourly or half-hourly basis, the PPA dated 30.05.1996
     executed by and between GEB and EPL provided u/Art.1 thereof that
     ‘Availability Period’ would mean ‘each of the 24 consecutive periods
     of 60 minutes in each day’ – Similarly, the PPA dated 29.06.1996
     between EPL and ESL provided u/Art.1 that the ‘Availability Period’
     would mean ‘each of the 24 consecutive periods of 60 minutes in
     each day’ – Therefore, there was no difference in the two PPAs
     as to the computation methodology. [Para 39]
     1.6 Further, as the power diversion, for which GUVNL has to be
     paid compensation, is for the supply made by EPL to ESL, over
     and above its allocated share, and as it was at the behest of EPL
     itself that this half-hourly computation methodology was adopted,
     pursuant to the recommendation of the Central Electricity Authority
     (CEA), there is no reason why the very same methodology should
     not be used for computing the electricity diversion so as to quantify
     the compensation payable to GUVNL for the excess power supply
     made to ESL by EPL from out of GUVNL’s allocated share. [Para 40]
     1.7 Order dtd.27.12.2019 passed by GERC and the judgment
     dtd.21.03.2025 passed by the APTEL modified to the extent
     indicated. [Para 42]

     Words and Phrases – ‘compensation’ vis-à-vis ‘reimbursement’:
     Held: ‘Compensation’ imply the payment to be made to one party
     to make good the loss or damage suffered by it owing to a breach
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    or violation of an obligation by the other – Reimbursement of fixed
    charges flowed from the provisions of the PPA itself and was not
    traceable only to the breach by EPL, in terms of the diverted
    capacity which fell to GUVNL’s share. [Para 35]

                            Case Law Cited
    Gujarat Urja Vikas Nigam Limited v. Essar Power Limited [2016] 5
    SCR 101 : (2016) 9 SCC 103 – explained.

                               List of Acts
    Electricity Act, 2003; Contract Act, 1872.

                            List of Keywords
    Gujarat Urja Vikas Nigam Limited (GUVNL); Gujarat Electricity
    Board (GEB); Essar Power Limited (EPL); Essar Steel Limited
    (ESL); Electricity diversion; Electricity diverted from allocated
    share; Power diversion; Proportionate principle of allocation;
    Reimbursement of fixed charges; ‘Compensation’; Computation
    of electricity diversion; Hourly or half-hourly basis; Computation
    methodology; Power Purchase Agreement (PPA); Principle of
    restitution.

                           Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 6581-6582
    of 2025
    From the Judgment and Order dated 21.03.2025 of the Appellate
    Tribunal for Electricity at New Delhi in AN No. 138 of 2021 and
    AN No. 201 of 2023

                        Appearances for Parties
    Advs. for the Appellant:
    C.A. Sundaram, M.G. Ramachandran, Sr. Advs., Ms. Hemantika
    Wahi, Anand Ganesan, Ms. Ranjitha Ramachandran, Ms. Jesal
    Wahi, Ms. Srishti Khindaria, Utkarsh Singh.
    Advs. for the Respondents:
    C.S. Vaidyanathan, Buddy Ranganatdhan, Sr. Advs., Mahesh
    Agarwal, Rohan Talwar, E. C. Agrawala, Shashwat Singh, Naman
    Agarwal, Ms. Shefail Tripathi.
[2025] 9 S.C.R.                                                      1579

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

                Judgment / Order of the Supreme Court

                                Judgment

     Sanjay Kumar, J.

1.   A tortuous litigative journey since the year 2005, notwithstanding,
     the matter is before this Court yet again.
2.   By way of these appeals filed under Section 125 of the Electricity
     Act, 2003, Gujarat Urja Vikas Nigam Limited (GUVNL) assails the
     common judgment dated 21.03.2025 passed by the Appellate Tribunal
     for Electricity at New Delhi (APTEL) in Appeal Nos. 138 of 2021 and
     201 of 2023. Appeal No. 138 of 2021 was preferred by GUVNL while
     Appeal No. 201 of 2023 was filed by Essar Power Limited (EPL).
     These appeals were directed against the order dated 27.12.2019
     passed by Gujarat Electricity Regulatory Commission, Gandhi Nagar
     (GERC), in Petition No. 972 of 2009 filed by GUVNL.
3.   Before considering the impact and effect of the past litigation between
     the parties and the orders passed therein, including by this Court,
     it would be apposite to note the factual narrative.
4.   Shorn of unnecessary detail, relevant facts unfold thus: Gujarat
     Electricity Board (GEB), the predecessor-in-interest of GUVNL,
     entered into a Power Purchase Agreement (PPA) with EPL on
     30.05.1996 for purchase of the electricity generated by EPL from its
     plant at Hazira for a period of 20 years. The total installed capacity
     of EPL’s plant was 515 MW and 300 MW thereof was to be supplied
     to GEB under the above PPA. EPL entered into a separate PPA with
     Essar Steel Limited (ESL), its sister company, on 29.06.1996 for sale
     and supply of the remaining 215 MW. In effect, the proportionate
     share of GEB and ESL in the electricity generated by EPL was in
     the ratio of 58.25:41.75, rounded off to 58:42.
5.   The cause for grievance, laying foundation for the inception of this
     litigation in the year 2005, dates back long prior thereto. In breach
     of the agreed proportionate shares in the electricity generated by
     it, EPL started supplying more power to its sister company, ESL,
     from out of the allocated share of GEB. This issue was raised
     by GEB, contending that EPL had supplied over its proportionate
     share of electricity to ESL which should be treated as deemed
1580                                                       [2025] 9 S.C.R.

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     supply of electricity by GEB itself and it should be compensated.
     EPL addressed letter dated 17.02.2000 to GEB, wherein it stated
     that if ESL drew more power than its allocated capacity, then GEB
     should charge ESL for the excess power drawn, as EPL’s deemed
     power supply to GEB, but in that case no deemed non-generation
     penalty should be imposed upon EPL. Eventually, GEB addressed
     letter dated 29.07.2004 to EPL about under-allocation of power to
     it and proposed recovery, on monthly basis, in terms of EPL’s letter
     dated 17.02.2000. GEB asked EPL to confirm the same to enable
     it to process the bill for the month of June, 2004 after adjusting the
     proposed recovery. There was further correspondence on the issue
     and GEB finally addressed letter dated 30.10.2004 to EPL, stating
     that a sum of ₹64 Crores would be recovered from EPL’s pending
     monthly invoices for diverting GEB’s allocated share from EPL’s
     515 MW plant to its sister company, ESL, by treating the same as
     deemed supply by GEB from April, 1998 till September, 2004. GEB
     further stated that recovery in respect of such diversion of energy
     from its allocated share to ESL from October, 2004 onwards would
     also be effected from the monthly invoices.
6.   This was followed up by GEB’s letter dated 11.11.2004 informing
     EPL of how the sum of ₹64 Crores was computed. The tabular
     statement in this letter set out the details of the energy diversion to
     ESL from 1998 till September, 2004. The amount recoverable was
     worked out, on the basis of HTP-1 Tariff Energy Charge @ ₹04.10
     per kWh, and after adjusting reimbursement of variable charges,
     the total recovery to be made for that period was quantified at ₹64
     Crores. It was made clear that this recovery had been worked out
     without applying electricity duty and that EPL would be informed
     about the amount recoverable on that count after receipt of legal
     opinion. Notably, the letter ended with the caveat that it was without
     prejudice to GEB’s rights under the provisions of the PPA.
7.   In response, EPL addressed letter dated 30.11.2004 to GEB stating
     that, with a view to close the discussion on the supply of power to
     ESL in excess of allocated capacity, it accepted GEB’s claim for
     ₹64 Crores. EPL thanked GEB officials for having closed the matter
     that was under discussion for the past few years and concluded by
     stating that it trusted that the methodology that had been finalized
     would be the basis adopted for the future. However, by letter dated
     31.12.2004, GEB informed EPL that the amount of ₹64 Crores was
[2025] 9 S.C.R.                                                           1581

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     not in final settlement of the issue nor was the methodology final
     for charging for the energy diverted in excess of the proportionate
     principle. GEB further stated that electricity duty was chargeable on
     such recovery and it would work out the final recovery amount and
     inform EPL accordingly.
8.   Thereafter, GUVNL came into existence on 01.04.2005 upon the
     unbundling of GEB. On 14.09.2005, GUVNL filed a claim before
     GERC under Section 86(1)(f) of the Electricity Act, 2003, which came
     to be numbered as Petition No. 873 of 2006, seeking a declaration
     that it was entitled to adjust from the tariff payable by it to EPL all
     such amounts that were received by EPL as a result of wrongful
     allocation of electricity. This petition was disposed of by GERC, vide
     order dated 18.02.2009, concluding thus:
     1)    that, EPL was obligated at all times under the PPA
           dated 30.05.1996 to declare the capacity from its entire
           generating station, as provided in Schedule VI of the PPA;
     2)    that, once such declared availability was made known,
           GUVNL was entitled to issue dispatch instructions in
           accordance with the terms of the PPA;
     3)    that, supply of electricity was to be made by EPL in
           proportion to the allocated capacity of 300 MW:215 MW,
           in accordance with the dispatch instructions;
     4)    that, the claims of GUVNL prior to 14.09.2002, on account of
           adjustment of Deemed Generation Incentive and diversion
           of allocated electricity (except to the extent of settlement
           of ₹64 Crores for diversion of electricity by EPL to ESL, in
           excess of 215 MW, from 1998 to September, 2004), was
           barred by limitation;
     5)    that, for the period after 14.09.2002, whenever EPL failed to
           declare the entire capacity of the plant, the supplies made
           by it to ESL in excess of the proportionate principle, as set
           out, was liable to be held as supply of electricity by GUVNL
           to ESL and GUVNL was entitled to be compensated for
           such supply at the prevailing HTP-1 Tariff, less variable
           costs, as was previously accepted by the parties for the
           diversion of electricity in excess of 215 MW;
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      6)     that, after 14.09.2002, if GUVNL did not schedule energy
             to the extent allocated under the proportionate principle,
             even though EPL had declared the capacity for the entire
             generating station in terms of Schedule VI of the PPA,
             then EPL was entitled to supply the additional power that
             was available to ESL upon reimbursing the proportionate
             annual fixed charges to GUVNL;
      7)     that, GUVNL was entitled to recover Deemed Generation
             Incentive from EPL for the period 14.09.2002 to 29.05.2006.
9.    Aggrieved by this order, both GUVNL and EPL preferred appeals
      before the APTEL. Appeal No. 77 of 2009 was GUVNL’s appeal
      while Appeal No. 86 of 2009 was filed by EPL. By judgment dated
      22.02.2010, the APTEL reversed in part the order dated 18.02.2009.
      The appeal filed by GUVNL was dismissed and the appeal of EPL
      was partly allowed. The APTEL held that EPL was not required to
      declare the capacity of the entire plant of 515 MW. It further held
      that non-declaration of available capacity on proportionate basis
      was not shown to have resulted in any loss to GUVNL and it was,
      therefore, not entitled to any compensation on that score. Lastly,
      the direction of GERC for reimbursement of annual fixed charges,
      whenever GUVNL did not secure electricity to the extent allocated
      under the proportionate principle, was held to be incorrect and the
      APTEL opined that no such refund was liable to be made.
10. This common judgment was subjected to appeal before this Court
    by GUVNL. Civil Appeal No. 3454 of 2010 was filed by it in relation
    to the APTEL’s confirmation of GERC’s finding on limitation,
    restricting its claims to three years prior to the filing of its petition
    on 14.09.2005. However, the said appeal was dismissed by this
    Court on 02.09.2011. The more substantial issue of diversion of
    its allocated electricity along with the consequences thereof was
    raised by GUVNL in Civil Appeal No. 3455 of 2010. The decision of
    this Court in the said appeal, delivered on 09.08.2016, is reported
    in Gujarat Urja Vikas Nigam Limited vs. Essar Power Limited1.
    Thereby, this Court set aside the judgment passed by the APTEL and
    restored GERC’s order dated 18.02.2009. However, as the actual
    working out, based on the said order, was to be made by the GERC


1    (2016) 9 SCC 103
[2025] 9 S.C.R.                                                               1583

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     and GUVNL had already filed its claim in relation thereto in Petition
     No. 972 of 2009, this Court left it open to GERC to proceed in the
     light of the findings recorded in its decision. Petition No.972 of 2009
     was decided by GERC on 27.12.2019. That order was challenged
     by both sides by way of separate appeals. APTEL’s judgment dated
     21.03.2025 in those appeals forms the fulcrum for the present set
     of appeals by GUVNL. GERC’s order dated 27.12.2019 and the
     APTEL’s appellate judgment dated 21.03.2025 will be analysed and
     discussed hereinafter.
11. At this stage, it may be noted that in this round of litigation, leading
    to the filing of the present appeals, GERC as well as the APTEL
    proceeded on the premise that the decision of this Court in Gujarat
    Urja Vikas Nigam Limited (supra) settled most of the issues. These
    appeals, therefore, turn upon what was held by this Court in the
    aforestated decision. Surprisingly, GUVNL and EPL place strong
    reliance on the said decision and both assert that the findings therein
    are in its favour. Correct understanding and application of that decision
    is, therefore, called for. Such hermeneutics would raise a substantial
    legal question, as rival interpretations are sought to be placed by
    both parties on the aforestated decision. The maintainability of these
    appeals, therefore, stands settled.
12. Though both sides have taken us through the aforestated decision
    and relied upon particular paragraphs therein to assert a claim that
    this Court had decided the issues, presently under consideration,
    in its favour, we are of the opinion that such disjointed reading of
    specific paragraphs or even sentences, out of context, would not
    be the proper approach to understand the import of the decision.
    It must, necessarily, be read as a whole and in its entirety to glean
    the findings and ratio decidendi laid down therein.
13. The question of law framed by this Court in Gujarat Urja Vikas Nigam
    Limited (supra) was whether the APTEL had correctly interpreted
    the terms of the PPA dated 30.05.1996 and was justified in reversing
    the findings of GERC, based on the interpretation of the PPA and
    other documents. This Court, then, noted the underlying facts and,
    in particular, the prayer of GUVNL in its Petition No. 873 of 2006,
    which reads as under:
           “(a) hold that the petitioner is entitled to adjust in the tariff
           payable by the petitioner to the respondent for purchase
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          of electricity all amounts received by the respondent as
          a result of wrong allocation of electricity; and deemed
          generation incentive when naphtha is proposed to be
          used as fuel;
          (b) award cost of the proceedings in favour of the petitioner
          and against the respondent; and
          (c) pass such other or further orders as may be deemed
          proper to give relief to the petitioner;
          (d) continue to raise bills on Essar Group of Companies
          based on proportionate methodology.”
14. This Court then noted the observation of GERC in its order dated
    18.02.2009 that GUVNL had an obligation, under the PPA dated
    30.05.1996, to pay annual fixed charges for the allocated capacity,
    i.e., 300 MW, and upon paying such annual fixed charges for the said
    capacity, GUVNL had a right to an equivalent amount of electrical
    output. GERC had observed that the purpose of paying such annual
    fixed charges was to ensure that GUVNL alone had the right to the
    said capacity and that no part of the same could be sold to any
    other party. This Court also noted the conclusion of GERC, upon a
    reading of Article 3.1 of the PPA dated 30.05.1996, that the entire
    capacity of the generating plant of EPL was to be shared only by
    the two beneficiaries, i.e., GUVNL and ESL. Noting that EPL’s PPA
    dated 29.06.1996 with ESL also recorded the allocation of electricity
    to GUVNL, GERC had held that the allocation was intended to be on
    a proportionate basis only between these two parties and, therefore,
    EPL could not argue that the PPAs did not recognize the proportionate
    principle. GERC’s finding, which is of significance presently, was
    that, if the proportionate principle was acceptable for recovery of
    fixed charges, it could not be abandoned for allocation of supply.
    This finding would have to be kept in mind as the claim of GUVNL
    before us is with regard to reimbursement of such fixed charges.
15. GERC had held, in no uncertain terms, that once the entire capacity
    was allocated between the two parties in a particular proportion, EPL
    could not violate the proportionate allocation for the benefit of any
    one party. Having sold 300 MW to GUVNL and 215 MW to ESL,
    for which fixed charges were paid by them in the said proportion,
    GERC opined that EPL could not argue that it could sell power to
    ESL beyond the capacity allocated to it. The obligation of EPL, as
[2025] 9 S.C.R.                                                      1585

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     per GERC, was to clearly declare the capacity of the generating plant
     as a whole on a weekly schedule and, once the declared availability
     for the entire plant was made known, the two beneficiaries were to
     issue dispatch instructions in accordance with the terms of their PPAs.
     The argument of EPL that it did not have any obligation to declare
     the capacity for the entire plant was, therefore, rejected by GERC.
16. Further, GERC observed that once the capacity of the generating plant
    as a whole was made available, the allocation of such capacity has
    to take place in the proportion that is contracted, i.e., the electrical
    output will be allocated and supplied between the two beneficiaries
    on proportionate basis, in accordance with the dispatch instructions.
    GERC noted that the obligation of EPL was to supply electrical output
    to GUVNL up to the allocated capacity of 300 MW and it also had an
    obligation to make payment of Deemed Non-generation Incentive and
    reduce annual fixed charges on a pro rata basis. This, as per GERC,
    however, did not negate the proportionate principle of allocation when
    EPL declared availability less than the allocated capacity.
17. It was further held by GERC that if GUVNL did not take the power
    declared available by EPL in terms of the aforesaid ratio, EPL would
    then have the right to sell that power to ESL, its sister company,
    subject to reimbursement of the proportionate annual fixed charges.
    In effect, if GUVNL did not schedule the power to the extent of
    availability declared by EPL of the entire plant, in terms of the PPA,
    it could not complain if that power was sold to EPL’s sister company
    and the proportionate annual fixed charges were reimbursed to it.
18. GERC further held that GUVNL would be entitled to claim
    compensation for the electricity wrongly diverted to ESL from the
    capacity allocated to GUVNL under the PPA dated 30.05.1996. The
    diversion, in the circumstance, was directed to be computed on an
    hourly basis. As regards the quantum of compensation payable on
    account of such diversion, GERC noted that the PPA was silent. It
    then referred to the settlement between the parties on account of
    such diversion between 1998 and September, 2004, by agreeing
    upon a particular methodology for determining the compensation. The
    methodology adopted was that GUVNL would be entitled to HTP-1
    Tariff Energy Charge for such diverted power, after excluding the
    variable costs. Observing that this appeared to be a fair manner of
    determining the compensation that was to be paid for the period after
    September, 2004 also, the GERC directed the parties to reconcile
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     the generation data and make a final calculation on the basis of the
     said principle. As regards the remaining period of the PPA, GERC
     observed that EPL had a legal obligation to declare availability for
     the entire capacity and was not to divert any power to ESL, contrary
     to the proportionate principle but, if GUVNL declined to purchase the
     power allocated on proportionate basis, GERC held that EPL would
     have the right to sell that power to ESL, subject to reimbursement
     of the proportionate fixed charges.
19. This Court then noted the findings of the APTEL in its judgment
    disposing of the appeals filed against GERC’s order dated 18.02.2009.
    Having set out those observations and findings, this Court held that
    the APTEL had committed an error in observing that GUVNL had
    not proved suffering of any damage, as paragraph 23 of its petition
    expressly demonstrated such damage. This Court also disagreed
    with the APTEL on its finding that there was no obligation on EPL
    to declare the availability of generated power for the entire plant,
    whereupon dispatch instructions could be issued by both the
    beneficiaries. This Court categorically held that the finding of the
    APTEL that GUVNL had accepted ₹64 Crores by way of settlement
    was against the record. The points for consideration were framed
    by this Court as under: -
           “…..Points for consideration
           20. The points which arise for consideration are:
           20.1. (i) True interpretation of PPA to determine whether
           there is any obligation to declare availability of power in
           the ratio of 300:215;
           20.2. (ii) Effect of letters dated 17-2-2000,4-3-2000 and
           4-10-2001 on the rights of the parties;
           20.3. (iii) Interpretation of Schedule VI to determine whether
           the obligation to issue dispatch instructions arose before
           declaration of availability.
           20.4. (iv) Relief to which the appellant may be entitled to.”
20. On the first issue as to the true interpretation of the PPA, this Court
    held that it clearly contemplated the proportion of allocation of capacity
    between the two beneficiaries and EPL, necessarily, had to operate
    its generating plant to meet the requirement of electrical output that
[2025] 9 S.C.R.                                                      1587

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     could be generated corresponding to the allocated capacity. This Court
     noted that GUVNL had to pay annual fixed charges as determined in
     terms of Article 7.1.1 of Schedule VII of the PPA dated 30.05.1996
     and EPL was under an obligation to declare the weekly schedule of
     the capacity available so that dispatch instructions could be issued
     on the basis of the said declaration. The contrary view of the APTEL
     was held to be erroneous and GERC’s finding was consequently
     held to be the correct interpretation of the PPA.
21. On the second issue, with regard to the effect of the correspondence
    between the parties on their respective rights, this Court noted the
    observation of GERC that, by its letter dated 17.02.2000, EPL had
    unequivocally agreed to supply of power in the ratio of 58:42 to GUVNL
    and ESL respectively. This Court held that the letters addressed
    by EPL clearly acknowledged its liability to allocate the generated
    power to GUVNL and ESL in the ratio of 58:42 and disagreed with
    the finding of the APTEL that the said letters could not be relied upon
    to support the claim of GUVNL that it was entitled to be allocated
    power in that proportion.
22. On the third issue, with regard to interpretation of Schedule VI to
    determine whether the obligation to issue dispatch instructions arose
    before the declaration of availability, this Court held that EPL was
    liable to declare the weekly capacity available and it was only on
    that basis, dispatch instructions were required to be issued. Again,
    the contrary view taken by the APTEL was rejected.
23. On the last issue, with regard to the relief to be granted to GUVNL,
    this Court observed that the amount of ₹64 Crores was not accepted
    by GUVNL by way of a final settlement and held that the APTEL
    had erred in observing that GUVNL had committed default in making
    payments, amounting to a breach of promise on its part, thereby
    absolving EPL of its obligation to supply power as per the PPA dated
    30.05.1996. However, upon being informed that these aspects had
    been examined by GERC in a subsequent dispute and an appeal
    in that regard was pending before the APTEL, this Court refrained
    from making further remarks and made it clear that its observations
    would not be treated as affecting the decision in the said appeal.
24. In summation, this Court held that the APTEL’s judgment was
    erroneous and set it aside, explicitly restoring GERC’s order dated
    18.02.2009. As GERC had left the actual working out of the loss
1588                                                      [2025] 9 S.C.R.

                        Supreme Court Reports


     suffered by GUVNL to be worked out separately and, on that basis,
     GUVNL had already filed a petition, this Court directed that the same
     could be revived and considered in the light of its findings.
25. Pursuant to the decision of this Court and the restored GERC’s
    order dated 18.02.2009, Petition No.972 of 2009 was disposed
    of by GERC on 27.12.2019. GERC held that, in the light of the
    concurrent finding on limitation, the claims of GUVNL for the period
    prior to 14.09.2002 were time-barred, except to the extent of ₹64
    Crores paid by EPL towards settlement of the claims for diversion of
    power during the period from 1998 to September, 2004. As regards
    the diversion computation, i.e., whether the same was to be made
    on hourly basis or on half-hourly basis, GERC referred to the letter
    dated 21.02.2005 of the Central Electricity Authority (CEA), based
    on EPL’s request in its letter dated 24.01.2003, wherein the CEA
    recommended that recording of meters should be on half-an-hour
    basis on the ESL load side and power evacuation side. Noting that
    there was no written agreement amending the PPA to that effect,
    in keeping with Article 12.1 thereof, GERC however held that as
    the recommendation of the CEA, vide letter dated 21.02.2005,
    had been accepted by both parties and had been acted upon by
    them with effect from 23.02.2005, the same should be considered
    while calculating the wrongful diversion of electricity by EPL with
    effect from 23.02.2005. The computation by GUVNL on half-hourly
    basis was, therefore, taken to be correct and not the hourly based
    computation submitted by EPL. GERC, however, opined that GUVNL
    would be entitled to receive only the Energy Charge of HTP-1 Tariff
    towards compensation for the diversion of electricity by EPL to ESL.
    Therefore, EPL was held liable to pay the difference at the rate of
    the Energy Charge of HTP-1 Tariff, after deducting variable costs/
    charges, for the diversion of excess electricity to EPL in violation of
    the proportionate principle of 58:42.
26. As regards the claim of GUVNL for reimbursement of fixed charges for
    the diversion of energy, along with penalty, GERC held that GUVNL
    was only entitled to compensation in terms of its earlier order dated
    18.02.2009, which had approved and affirmed the methodology
    followed by the parties for computing the compensation, culminating in
    the settlement for ₹64 Crores. As that compensation methodology did
    not include fixed charges or penalty and as its order dated 18.02.2009
    stood restored after being upheld by this Court, GUVNL was held
[2025] 9 S.C.R.                                                   1589

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     disentitled to seek review of the same and claim something more.
     GERC affirmed that, as the component of fixed charges and penalty
     for drawal in excess of contract demand, had not been considered
     or factored in while determining the compensation earlier, the same
     could not be allowed in the present proceedings as it would amount
     to review of the earlier order.
27. GERC, accordingly, computed the compensation payable based on
    the HTP-1 Tariff Energy Charge, duly adjusting the variable charges
    therefrom. EPL was held not liable to pay fixed charges and penalty
    for excess drawal of electricity. On the issue of Delayed Payment
    Charges (DPC), which had not been considered in the earlier round
    by GERC, APTEL and this Court, GERC held that GUVNL was entitled
    to Delayed Payment Charges from September, 2002 to March, 2019.
    Deemed Generation Incentive paid by GUVNL to EPL between
    September, 2002 and May, 2006, quantified at ₹36.62 Crores, was
    also held liable to be refunded. Delayed Payment Charges were
    directed to be paid by EPL, as per the PPA, at the rate of 2% over
    the average interest rate charged by GUVNL’s bank on working
    capital loans during the preceding 12 months.
28. GUVNL and EPL assailed GERC’s order dated 27.12.2019 in
    separate appeals before the APTEL. By the common judgment
    dated 21.03.2025, presently under scrutiny, the two appeals were
    disposed of. Therein, on the issue of whether computation of
    diverted energy should be on hourly or half-hourly basis, the APTEL
    disagreed with the view taken by GERC. According to it, once the
    earlier GERC’s order dated 18.02.2009 recorded that the diversion
    should be computed on hourly basis and the same stood confirmed
    by this Court, GERC ought not to have held to the contrary. It was
    also noted that the PPA dated 30.05.1996 had not been amended
    and the unamended PPA spoke only of hourly based computation.
    On the claims of GUVNL arising from diversion of electricity by
    EPL to ESL, in the light of the earlier orders, the APTEL noted that
    GUVNL would be entitled to compensation for the diverted supply of
    power by EPL to ESL in excess of the proportionate principle and,
    therefore, GERC had correctly worked out the units for compensation
    as the difference between the units actually supplied to ESL and its
    proportionate share in the entire plant availability. The APTEL also
    confirmed that the methodology for computation of the compensation
    was correctly applied as the HTP-1 Tariff Energy Charge. The order
1590                                                         [2025] 9 S.C.R.

                          Supreme Court Reports


     of GERC holding to this effect was, therefore, found to be free
     of infirmity. As regards the recovery of ₹36.62 Crores by GUVNL
     towards Deemed Generation Incentive, EPL contended that only a
     sum of ₹34.42 Crores had been paid towards such incentive and
     not ₹36.62 Crores. A dispute was, therefore, sought to be raised as
     regards the difference of ₹2.2 Crores. On the other hand, GUVNL
     contended that this aspect was never raised before GERC, though
     the data was presented by GUVNL in that regard and was accepted
     by GERC. It was also pointed out that the issue was not even raised
     in the appeal filed by EPL but was belatedly introduced in its rejoinder
     to GERC’s reply. However, the APTEL opined that, as the matter
     was being remanded to GERC for re-computation of the amounts
     due under various heads, this aspect could also be considered.
     Similarly, another issue raised by EPL with regard to the actual
     amount that had been deducted by GUVNL from its invoices, that
     is, whether it was ₹234.60 Crores or ₹157.88 Crores, was also left
     open to be considered by GERC. On Delayed Payment Charges,
     the APTEL noted that GERC had applied simple interest on such
     payment though EPL, in relation to its claims made against GUVNL
     on the count of delayed payment, had contended in another pending
     appeal that it was entitled to compound interest. APTEL noted that
     the issue of Delayed Payment Charges had not been determined
     in GERC’s earlier order dated 18.02.2009. Observing that GERC
     had determined Delayed Payment Charges on simple interest
     basis, as per Article 5.3.4 of the PPA, the APTEL rejected the claim
     for compound interest. A caveat was, however, added that in the
     event EPL secured an order in its pending appeal for payment of
     compound interest on delayed payments, the same benefit should
     be given to GUVNL also. GERC’s order was, accordingly, confirmed
     subject to the above modifications. GERC was directed to give both
     parties a reasonable opportunity of hearing and pass orders afresh
     in accordance with law and in terms of the directions issued. We are
     informed that GERC is presently seized of this exercise.
29. Though an argument was advanced on behalf of GUVNL for payment
    of compensation on the parameters laid down in Section 73 of the
    Indian Contract Act, 1872, and more particularly, illustration (j) therein,
    we are of the opinion that, in the light of para 9.13 in GERC’s order
    dated 18.02.2009 which was affirmed by this Court in the earlier
    round, it is not open to GUVNL to agitate its claim for compensation
[2025] 9 S.C.R.                                                       1591

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     beyond what was determined as just and acceptable in the said para
     and was accepted and confirmed by this Court, while restoring the
     order of GERC. This Court, no doubt, also affirmed that there was no
     settlement between the parties as to the finality attaching to the sum
     of ₹64 Crores, but the fact remains that GEB and, thereafter, GUVNL
     never raised any further claim for compensation against EPL for the
     period covered by that settlement, i.e., April, 1998 to September, 2004.
     The imprimatur of this Court as to the methodology that formed the
     basis for the computation of ₹64 Crores for the diverted electricity
     from 1998 till September, 2004, and the edict that it would hold good
     even for the period after September, 2004, is binding on the GUVNL
     and there is no possibility of reopening that issue.
30. That being said, we may note that payment of fixed charges by
    GUVNL, in terms of the PPA dated 30.05.1996, is traceable to
    Article 7.1.1 in Schedule 7 thereof. ‘Tariff’, as defined by Article
    7.1 therein, reads to the effect that it should be determined on the
    basis of annual fixed charges, in terms of Article 7.1.1, along with
    variable charges, in terms of Article 7.2, and incentive payment, in
    terms of Article 7.3. The annual fixed charges under Article 7.1.1
    were to be computed on the basis of Interest on Debt, Operation
    and Maintenance Expenses, Depreciation, Tax on Income, Return
    on Equity, Interest on Working Capital and Base Foreign Debt
    Repayment Adjustment Amount. The invoicing of fixed charges was
    to be made on a monthly basis, based on the annual fixed charges
    computed in terms of Article 7.1.1. Variable charges under Article 7.2
    were to be calculated monthly on the basis of Quantity of Fuel and
    Cost of Fuel per kWh. Incentive payments under Article 7.3 included
    the Deemed Generation Incentive. Article 5 of the PPA dealt with
    billing and payment and Article 5.2 therein provided for the monthly
    invoice being submitted by EPL, consisting of the amounts to be paid
    as per the tariff computed in accordance with Schedule VII. Article
    5.3.2 provided for payment and stated that variable charges would
    be payable in each month, within the due date, while fixed charges
    in each month would be the equivalent of 1/12th of the annual fixed
    charges and shall be adjusted at the end of the accounting year
    in the event the level of generation achieved by EPL during that
    accounting year was less than the allocated capacity. Incentives
    were also payable on a monthly basis from the month during which
    the level of generation exceeded the allocated capacity.
1592                                                        [2025] 9 S.C.R.

                         Supreme Court Reports


31. The issue before us is as to the total amount that can be claimed
    by GUVNL for the electricity diverted by EPL to ESL from out of its
    allocated share, that is, 58% of the available electricity for the entire
    plant declared on a weekly basis. In that context, what emerges now
    from the adjudication by GERC and the APTEL, presently under
    scrutiny, is that ‘compensation’ could only be claimed by GUVNL for
    such wrongful diversion by EPL on the basis of HTP–1 Tariff Energy
    Charge, as this was what was found to be an appropriate method
    for computing compensation on the basis of the earlier settlement
    arrived at by and between the parties for the period April, 1998 to
    September, 2004. However, neither GERC nor the APTEL took note
    of what was stated earlier by this Court and GERC with regard to
    ‘reimbursement’ of fixed charges. This Court had explicitly recorded
    that the PPA dated 30.05.1996 provided for the ‘proportionate principle’
    for recovery of fixed charges and, therefore, applied the same to
    allocation of available electricity also, noting the fact that there were
    only two beneficiaries for the electricity generated by EPL. This Court
    observed that once EPL sold 300 MW of the generated power to
    GUVNL and the remaining 215 MW to ESL, for which both parties
    paid fixed charges in the said proportion, EPL could not argue that it
    could sell more power to ESL. It was also noted that the intention of
    EPL was to recover the fixed charges only from these two beneficiaries
    in proportion to their allocated capacity.
32. As GUVNL was required to assess the fixed charges on an annual
    basis and adjust the same on a monthly basis, by paying 1/12th
    thereof, any shortfall in the supply of electricity from its allocated
    58% obviously meant that the fixed charges proportionate to such
    shortfall were liable to be reimbursed. Even if GUVNL did not accept
    the electricity declared available by EPL, in terms of the proportionate
    principle, and EPL could sell that power to ESL, it was subject to
    reimbursement of proportionate annual fixed charges. This was
    pointed out by GERC in para 9.11 of its order dated 18.02.2009
    which was affirmed by this Court. The para reads as under: -
          ‘9.11. However, if GUVNL does not take the power declared
          available by EPL in terms of the aforesaid ratio, EPL will
          have the right to sell the power to its sister concern subject
          to reimbursement of the proportionate of the annual fixed
          charges. GUVNL cannot make a submission that although
          it will not purchase such power as declared available by
[2025] 9 S.C.R.                                                          1593

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

           EPL, EPL cannot sell the same to its sister concern. Such a
           submission would defeat the purpose of the Electricity Act,
           2003 and the National Electricity Policy which promotes
           generation and encourages sale of surplus capacity. If
           GUVNL does not schedule the power to the extent of
           availability declared by EPL of the entire plant in terms of
           the PPA, it cannot complain if the power is sold to EPL’s
           sister concern and the proportionate of the annual fixed
           cost is reimbursed.’
                                                   (emphasis is ours)

33. Significantly, in its judgment dated 22.02.2010, the APTEL had
    disagreed with GERC’s order dated 18.02.2009 on the reimbursement
    of fixed charges and held that no such reimbursement was to be made.
    However, that finding was reversed by this Court when the APTEL’s
    judgment was set aside and GERC’s order dated 18.02.2009 was
    restored. Therefore, reimbursement of fixed charges was separately
    dealt with by this Court and EPL was held liable to refund such fixed
    charges proportionately for the shortfall in the supply of electricity
    to GUVNL from its allocated share of 58% of the declared available
    electricity which had been diverted by EPL to ESL. Though para
    9.11 of GERC’s order dated 18.02.2009 spoke of a situation where
    this happened due to GUVNL not opting to purchase its share of
    the declared available electricity, the same principle would apply
    even when EPL wrongfully diverted GUVNL’s share of electricity
    to ESL without its knowledge. Further, and most significantly, the
    PPA envisaged adjustment of the fixed charges at the end of the
    accounting year if EPL’s generation during that year was less than the
    capacity allocated to GUVNL. Therefore, payment of fixed charges
    by GUVNL was pegged to the actual supply of its allocated share
    of electricity and reimbursement of such fixed charges was to be
    made proportionately in the event of any shortfall.
34. In addition to such reimbursement of fixed charges as a separate
    component, in terms of what was held by this Court, GUVNL was
    also held entitled to ‘compensation’ in accordance with para 9.13 of
    GERC’s order dated 18.08.2009, which reads as under: -
           ‘9.13. As regards the quantum of compensation payable
           on account of diversion, the PPA is silent on the same.
1594                                                      [2025] 9 S.C.R.

                        Supreme Court Reports


          The parties in the settlement for dues on account of
          diversion for the period between 1998 and September,
          2004 agreed on a particular methodology for determining
          such compensation. The parties had agreed that GUVNL
          is entitled to the HTP 1 energy tariff after excluding the
          variable cost. The diversion in the circumstance should
          be computed on an hourly basis. This appears to be a
          fair manner of determining the compensation that is to be
          paid for the period after September, 2004. The parties are
          required to reconcile the generation data and make final
          calculation on the basis of the aforesaid principle.’
35. Needless to state, the very connotation of ‘compensation’ would
    imply the payment to be made to one party to make good the loss or
    damage suffered by it owing to a breach or violation of an obligation
    by the other. Reimbursement of fixed charges flowed from the
    provisions of the PPA itself and was not traceable only to the breach
    by EPL, in terms of the diverted capacity which fell to GUVNL’s share.
    That was only one of the scenarios in which such reimbursement
    stood triggered apart from those envisaged by the provisions of the
    PPA. The misconceived notion that ‘fixed charges’ were also to be
    included in the ‘compensation’ to be claimed by GUVNL, resulted
    in arguments being advanced before GERC and the APTEL to that
    effect and the rejection thereof by both the fora, in this round of
    litigation, relying on para 9.13 of GERC’s order dated 18.02.2009.
    However, neither GERC nor the APTEL took note of what was stated
    by this Court, in the preceding paragraphs, referring to the GERC’s
    earlier order with regard to reimbursement of fixed charges in the
    event the corresponding power was not supplied to GUVNL, as per
    its allocated proportionate share in the declared available capacity.
36. At this stage, we may make it clear that we are not building up a
    new case for GUVNL contrary to its pleaded case. It is a well settled
    proposition of law that parties would be bound by their pleadings and
    the case put forth by them on the strength thereof and it is not for
    the Court to substitute its own notion of what that case should be.
    However, as already noted supra, this case entirely turns upon the
    earlier decision of this Court. Each of the parties has its own take on
    how that decision is to be interpreted to suit its own interest, even
    if mistakenly so. We are merely giving effect to the clear findings
    of this Court in that earlier decision, irrespective and independent
[2025] 9 S.C.R.                                                       1595

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     of how the parties understood them and how they formulated their
     cases on the basis of such understanding. This Court cannot be a
     mute spectator when its judgments and findings are misconstrued
     or misunderstood by the parties and are projected erroneously in a
     subsequent round of litigation.
37. In any event, it is not open to EPL to claim fixed charges twice over, by
    appropriating the excess fixed charges paid by GUVNL for electricity
    that was never supplied to it from its allocated proportionate share,
    on the one hand, and also pocketing the fixed charges paid by ESL
    for the extra electricity that was supplied to it from out of GUVNL’s
    share. In this regard, we may note that the PPA dated 29.06.1996
    between EPL and ESL also provided for similar fixed charges being
    paid by ESL for the electricity supplied towards its proportionate
    share. Once that proportion was not adhered to and excess power
    was supplied to ESL, EPL would obviously collect fixed charges from
    ESL for such excess power supply also.
38. The finding of GERC and the APTEL that GUVNL is not entitled to
    reimbursement of fixed charges is, therefore, unsustainable. Once
    GUVNL did not receive the electricity for which such fixed charges
    had been computed and paid on a monthly basis, it was entitled to
    reimbursement thereof, not as compensation, but on the principle of
    restitution as such payment was not at all due from it. The argument
    to the contrary by EPL, which was accepted by GERC and the APTEL,
    on the strength of the methodology to be adopted for computing
    compensation under para 9.13 of GERC’s order dated 18.02.2009,
    therefore, cannot be accepted. GUVNL was entitled to reimbursement
    of the fixed charges, in relation to the diverted electricity from out
    of its allocated share, in addition to the compensation payable for
    such wrongful diversion, computed on the basis of HTP-1 Tariff
    Energy Charge.
39. As regards the computation of the electricity diversion being made
    on hourly or half-hourly basis, we find that the PPA dated 30.05.1996
    executed by and between GEB and EPL provided under Article
    1 thereof that ‘Availability Period’ would mean ‘each of the 24
    consecutive periods of 60 minutes in each day’. Similarly, the PPA
    dated 29.06.1996 between EPL and ESL provided under Article 1
    that the ‘Availability Period’ would mean ‘each of the 24 consecutive
    periods of 60 minutes in each day’. Therefore, there was no difference
1596                                                        [2025] 9 S.C.R.

                         Supreme Court Reports


     in the two PPAs as to the computation methodology. While so, it
     appears that EPL itself addressed letter dated 24.01.2003 to the CEA
     seeking its advice under Section 73 of the Electricity Act, 2003, with
     regard to the metering scheme and installation of a circuit breaker
     for its 515 MW plant at Hazira. The CEA noted that EPL had set
     up a 515 MW Power Plant at Hazira in the year 1996-97 and had
     entered into two separate PPAs, one for 300 MW with GEB and the
     other for 215 MW with ESL. However, as GEB wanted to install a
     circuit breaker in the main bus bar, EPL had addressed letter dated
     24.01.2003 raising certain queries for the advice of the CEA. EPL had
     voiced the concern that installation of a circuit breaker may jeopardize
     the safety of its plant as it needed to be connected with the grid in
     all conditions. Thereupon, vide its letter dated 21.02.2005, the CEA
     made certain recommendations, one of which was that recording of
     meters should be on half-hourly basis on ESL load side and power
     evacuation side. Admittedly, based on this recommendation, GUVNL,
     EPL and ESL acted upon and carried out the metering on the load
     side and power evacuation side of ESL on half-hourly basis.
40. The recommendation of the CEA was on 21.02.2005. It was shortly
    thereafter that GUVNL filed its first petition before GERC. Prior to
    that, GEB also calculated the diversion of energy up to 21.02.2005
    on hourly basis and it was only thereafter that the computation was
    made on half-hourly basis. As the power diversion, for which GUVNL
    has to be paid compensation, is for the supply made by EPL to ESL,
    over and above its allocated share, and as it was at the behest of
    EPL itself that this half-hourly computation methodology was adopted,
    pursuant to the recommendation of the CEA, there is no reason why
    the very same methodology should not be used for computing the
    electricity diversion so as to quantify the compensation payable to
    GUVNL for the excess power supply made to ESL by EPL from out
    of GUVNL’s allocated share.
41. Reference made by EPL, in this regard, to the grounds of GUVNL
    before the APTEL, in Appeal No. 77 of 2009, is misconceived. The
    ground raised was apropos the allocated share of 58:42 of the 515
    MW capacity, i.e., 300 MW:215 MW, and in that context, GUVNL
    stated that in accordance with the above ratio, EPL was obligated
    to declare availability from the 515 MW capacity generating station
    for supply to GEB/GUVNL and the ESL maintaining the proportion
    of 58%:42% for each time block which for the purpose of the PPA
[2025] 9 S.C.R.                                                      1597

                    Gujarat Urja Vikas Nigam Limited v.
                     Essar Power Limited and Another

     is one hour. This passing reference to the PPA methodology of
     one hour is not sufficient in itself to negate the admitted adoption
     of the methodology recommended by the CEA on the application
     made by EPL itself. Having invited that methodology for supply of
     power so as to avoid installation of a circuit breaker, EPL cannot
     fight shy of the same methodology being adopted for computation
     of the excess power diverted by it to ESL from out of the allocated
     share of GUVNL. GERC was, therefore, correct in adopting this
     methodology but the APTEL reversed the same on the technical
     ground that the PPA had not been amended. Even if both PPAs
     were not amended by way of written agreements, as provided in
     Article 12.1 thereof, the irrefutable fact remained that GUVNL, EPL
     and ESL accepted, adopted and acted upon the recommendation of
     the CEA in its letter dated 21.02.2005 and converted the ‘Availability
     Period’ from hourly basis to half-hourly basis on ESL load side and
     power evacuation side. It is not open to EPL to secure, at its own
     behest, such a modification, act upon it, and then argue that though
     the same was adopted for supply of electricity by it to ESL, it ought
     not to be adopted for computing the excess electricity supplied by it
     to ESL from out of the allocated share of GUVNL. Significantly, this
     aspect was not even in issue during the first round and the mere
     statement by GERC in its order dated 18.02.2009 that the diversion
     should be computed on an hourly basis, in ignorance of the CEA’s
     recommendation to the contrary and its acceptance by the parties,
     cannot be said to be binding even if the GERC’s order was restored
     by this Court thereafter.
42. GUVNL objects to the remand of certain issues by the APTEL, which
    were not raised initially by EPL, on the ground that it was not open
    to EPL to raise such new grounds at the appellate stage. However,
    we may note that GUVNL itself did not raise the issue of hourly/
    half-hourly computation before the APTEL or this Court, in the earlier
    round of litigation, though GERC had referred to it in its order dated
    18.02.2009. Despite the same, we have entertained that ground in
    this round of litigation as it is not open to EPL, which acted contrary
    to its obligations under the PPA, to claim such protection and seek
    undue advantage. Similarly, in the event GUVNL actually paid a
    lesser amount towards Deemed Generation Incentive and is now
    claiming ₹2.2 Crores more than what is due and payable to it, that is
    an aspect that can be looked into by GERC. So too is the case with
1598                                                      [2025] 9 S.C.R.

                            Supreme Court Reports


     the actual deductions made by GUVNL, as that would be a matter
     of record and can be easily verified and determined by GERC. We
     are, therefore, not inclined to interfere with those directions of the
     APTEL. However, the order dated 27.12.2019 passed by GERC and
     the judgment dated 21.03.2025 passed by the APTEL shall stand
     modified to the extent indicated hereinabove.
43. The appeals are disposed of in the aforestated terms. Parties shall
    bear their own costs.

     Result of the case: Appeals disposed of.




     †
         Headnotes prepared by: Divya Pandey