Supreme Court of India
JAIPUR VIDYUT VITRAN NIGAM LTD. & ORS.versusADANI POWER RAJASTHAN LTD. & ANR.
- Citation
- 2025 INSC 770
- Decided
- 23 May 2025
- Disposal
- Dismissed
- Bench
- M M SUNDRESH
Holding
The Coal India notification is a change in law event under Article 10.2.1, entitling the generator to compensation from the date of the notification, and Article 10.5.1(ii) does not apply; the appeal is dismissed.
Summary
The dispute arose from a Coal India notification dated 19‑12‑2017 imposing Evacuation Facility Charges (EFC) on coal dispatches, which the power generator (Adani Power Rajasthan Ltd.) claimed constituted a "change in law" under the Power Purchase Agreement (PPA) with the Rajasthan distribution companies. The generator sought compensation and carrying cost from the date of the notification, while the appellants argued that the change should be treated under Article 10.5.1(ii) and that a supplementary bill should have been raised earlier. The Supreme Court held that the CIL notification is a change in law event under Article 10.2.1, entitling the generator to compensation from the notification date, and that Article 10.5.1(ii) does not apply because there is no judicial interpretation involved. The Court further affirmed that a supplementary bill may be raised after adjudication and rejected the appellants' claim for denial of carrying cost. Consequently, the appeal was dismissed.
Issues considered
- Whether the Coal India notification imposing Evacuation Facility Charges amounts to a "change in law" under Article 10 of the PPA.
- Whether Article 10.5.1(ii) of the PPA applies to the present facts, i.e., whether the change is due to a judicial or governmental interpretation.
- Whether the generator is entitled to compensation and carrying cost (Late Payment Surcharge) from the date of the notification.
- Whether a supplementary bill must be raised before the entitlement to compensation can be enforced.
Legislation cited
- Code of Civil Procedure, 1908s. 100
- Electricity Act, 2003s. 111, s. 125, s. 86
Headnote
Issue for Consideration Issue pertains to whether the notification by the Coal India imposing Evacuation Facility Charges constituted a change in law under the Power Purchase Agreement; and as regards the interpretation of Article 10.2.1 vis-à-vis Article 10.5 of the PPA with Headnotes† Electricity Act, 2003 – Power Purchase Agreement – Art.10 – Principles for computing impact of Change in Law – Tariff Adjustment Payment on account of Change in Law – Power Purchase Agreement between the appellants-Discoms and respondent
Subjects
Evacuation Facility ChargesChange in lawPower Purchase AgreementPrinciples for computing impact of Change in LawTariff Adjustment PaymentElectricity Regulatory CommissionLate Payment Surcharge ratesAdditional chargesCompensationRestitutionary principleCut-off datePrinciple of restitutionMonthly tariff paymentSupplementary bill
Judgment
[2025] 5 S.C.R. 2486 : 2025 INSC 770
Jaipur Vidyut Vitran Nigam Ltd. & Ors.
v.
Adani Power Rajasthan Ltd. & Anr.
(Civil Appeal No. 4336 of 2025)
23 May 2025
[M.M. Sundresh* and Rajesh Bindal, JJ.]
Issue for Consideration
Issue pertains to whether the notification by the Coal India imposing
Evacuation Facility Charges constituted a change in law under the
Power Purchase Agreement; and as regards the interpretation
of Article 10.2.1 vis-à-vis Article 10.5 of the PPA with specific
reference to 10.5.1(ii).
Headnotes†
Electricity Act, 2003 – Power Purchase Agreement – Art.10 –
Principles for computing impact of Change in Law – Tariff
Adjustment Payment on account of Change in Law – Power
Purchase Agreement between the appellants-Discoms and
respondent No.1-Power Generator for the supply of 1200 MW
power – Issuance of Notification by Coal India imposing a levy
of Evacuation Facility Charges – Next day, respondent No.1
informed appellants that the Notification constituted a ‘change
in law’ event – Respondent no.1 then filed a Petition before
the Electricity Regulatory Commission – Some reliefs allowed,
and against refusal of some of the claims, the respondent
No.1 filed an appeal – Appellate tribunal allowed the delay in
filing and re-filing of the appeal – Appellate tribunal held that
the Notification would amount to a change in law, and the
respondent No.1 would be entitled to the grant of compensation
from the date of the Notification along with carrying cost at
Late Payment Surcharge rates and remanded the matter to the
Commission for computation of the amounts – Challenge to:
Held: All such additional charges which are payable on account
of orders, directions, notifications, regulations, etc. issued by the
instrumentalities of the State, after the cut-off date, will have to
* Author
[2025] 5 S.C.R. 2487
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
be considered to be “change in law” events – Generators would
be entitled to compensation on the restitutionary principle on such
changes occurring after the cut-off date – Art.10.2.1 in the PPA was
incorporated based on the principle of restitution, to compensate the
affected party in order to restore it to the same economic position,
but for the change in law – This particular provision is a substantive
one, which in a normal circumstance, has to be given effect to in
letter and spirit – Under Art.10.5.1(i) of the PPA, the adjustment in
monthly tariff payment shall become effective from the date notified
in the change in law – Art. 10.5.1(ii) of the PPA emerge where there
is an adjudication by way of an order/judgment of a competent
Court or Tribunal or an Indian Governmental Instrumentality, is not
applicable to the facts of the instant case since there is no change
in law which has occasioned by way of an interpretation given by
a Court or a Tribunal or an Indian Governmental Instrumentality –
Thus, no reason to interfere with the impugned judgment – Liability
has been fastened upon the appellants under the agreement –
Submission that the supplementary bill ought to have been raised
earlier and, thus, the payment can only be made thereafter has
neither a factual basis nor a legal one. [Paras 18, 21-25, 28]
Case Law Cited
GMR Warora Energy Ltd. v. CERC [2023] 8 SCR 183 : (2023) 10
SCC 401; Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power
Ltd. [2019] 4 SCR 487 : (2019) 5 SCC 325; Uttar Haryana Bijli
Vitran Nigam Ltd. v. Adani Power (Mundra) Ltd. [2022] 11 SCR
102 : (2023) 2 SCC 624 – relied on.
Prem Cottex v. Uttar Haryana Bijli Vitran Nigam Ltd. [2021] 8 SCR
645 : (2021) 20 SCC 200 – referred to.
List of Acts
Electricity Act, 2003; Code of Civil Procedure, 1908.
List of Keywords
Evacuation Facility Charges; Change in law; Power Purchase
Agreement; Principles for computing impact of Change in Law;
Tariff Adjustment Payment; Electricity Regulatory Commission;
Late Payment Surcharge rates; Additional charges; Compensation;
Restitutionary principle; Cut-off date; Principle of restitution; Monthly
tariff payment; Supplementary bill.
2488 [2025] 5 S.C.R.
Supreme Court Reports
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4336 of 2025
From the Judgment and Order dated 18.04.2024 of the Appellate
Tribunal for Electricity at New Delhi in AN No. 237 of 2023
Appearances for Parties
Advs. for the Appellants:
Shyam Divan, Sr. Adv., Kartik Seth, Ms. Shriya Gilhotra, Raghav
Sharma, Saurabh Chaturvedi, Chiranjeev Sharma, M/S. Chambers
of Kartik Seth.
Advs. for the Respondents:
Dr. A.M. Singhvi, Sr. Adv., Mahesh Agarwal, Amit Kapur,
Ms. Poonam Sengupta, Arshit Anand, Shashwat Singh, Saunak
Rajguru, Subham Bhut, Siddharth Seem, E. C. Agrawala.
Judgment / Order of the Supreme Court
Judgment
M.M. Sundresh, J.
1. Admit.
2. We have heard the learned Senior Counsel, Mr. Shyam Divan and
learned Counsel, Mr. Karthik Seth appearing for the appellants and
the learned Senior Counsel, Dr. Abhishek Manu Singhvi appearing
for the respondent No. 1, at length. All the relevant documents,
including the written submissions of the parties, have been perused.
3. In pursuance of the Letter of Intent issued to Adani Power Rajasthan
Ltd. (respondent No.1-Power Generator), on 17.12.2009, a Power
Purchase Agreement (hereinafter referred to as the “PPA”) dated
28.01.2010 was entered into between appellant Nos.1, 2 and 3,
who are the Rajasthan Discoms engaged in the distribution and
supply of electricity, on one side and respondent No.1 on the other,
for the supply of 1200 MW Aggregate Contracted Capacity at a
levelized tariff of Rs.3.238 per unit. The same was duly approved
by respondent No.2.
4. While the agreement was in operation, a Notification came to be
issued at the instance of M/s. Coal India Limited (hereinafter referred
[2025] 5 S.C.R. 2489
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
to as “CIL”), dated 19.12.2017, imposing a levy of Evacuation
Facility Charges (hereinafter referred to as the “EFC”) with effect
from 20.12.2017. Immediately, on the very next day i.e. 20.12.2017,
respondent No.1 informed appellant No. 4 that the Notification dated
19.12.2017 constituted a ‘change in law’ event. The Notification dated
19.12.2017 is extracted below:
“COAL INDIA LIMITED
A Maharatna Company
(A Govt. of India Enterprise)
COAL BHAWAN
Sales & Marketing Division
Ground & Floor, Premises No, 04 MAR, Plot No. AF-III,
Action Area -1A
Rajarhat, New Town, Kolkata - 700156
Phone: 033-71104143, Fax: 033-23244229, Website:
………………………………
CIN: L23 L09WB1973GO1028844
PRICE NOTIFICATION: CIL:S&M: GM(F)Pricing 2017/
1005 dated 19th Dec. 2017
Charge of Rs. 50 (Fifty) per tonne shall be levied as
‘Evacuation Facility Charges’ on all despatches except
despatch through rapid loading arrangement. This is
effective from 00:00 hour of 20” Dec. 2017. This issues
with the approval of the competent authority.
General Manager (M&S)
Marketing & Sales”
5. On its failure in eliciting a suitable reply, respondent No.1 filed a
Petition bearing No.1373/2018 before the Rajasthan Electricity
Regulatory Commission (hereinafter referred to as the “RERC”),
invoking Section 86 of the Electricity Act, 2003 (hereinafter referred
to as the “2003 Act”) read with Article 10 of the PPA. While rejecting
some of the reliefs, the RERC did allow some of the other prayers
2490 [2025] 5 S.C.R.
Supreme Court Reports
sought for by respondent No.1. Against the refusal of some of the
claims, the respondent No. 1 filed an appeal before the Appellate
Tribunal for Electricity (hereinafter referred to as the “APTEL”).
6. The appeal under Section 111 of the 2003 Act was so made along
with an application seeking condonation of delay of 332 days in filing.
Another application was filed seeking to condone the delay of 236
days in re-filing the appeal. Upon hearing both sides, the aforesaid
applications were allowed and, thereafter, the appeal was decided on
merits. It is pertinent to note that the common order by the APTEL,
dated 23.01.2023, condoning the delay on both counts, has attained
finality for want of further challenge.
7. The APTEL, inter alia, held by its judgment dated 18.04.2024, after
elaborately considering the submissions made by both sides, that the
Notification dated 19.12.2017 would amount to a change in law, and
the respondent No. 1 would be entitled to the grant of compensation
from the date of the Notification, by taking note of the decision
rendered by this Court in GMR Warora Energy Ltd. v. CERC (2023)
10 SCC 401 (hereinafter referred to as “GMR Warora”) which, in
turn, also placed reliance upon the earlier decisions of this Court.
While doing so, it also took into consideration, the fair submission
made on behalf of the appellants that the principal issue of levy of
EFC, and consequently, the date from which the respondent No. 1
would be entitled to the grant of compensation, is covered by the
aforementioned judgement. Further reliance was placed on the said
decision by the APTEL, for the purpose of granting carrying cost at
the rate of Late Payment Surcharge (hereinafter referred to as “LPS”),
on a compounding basis, which is to be reckoned from the date of
the Notification. The submission made by the appellants before the
APTEL that a supplementary bill is mandatory before seeking relief
for the LPS was also considered and rejected. Once again, the
impact of delay was argued and considered with specific reference
to carrying cost. Accordingly, the following conclusion was arrived at:
“X.CONCLUSION:
The Appellant shall, in terms of what has been indicated
hereinabove, 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. The sum representing this
[2025] 5 S.C.R. 2491
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
benefit shall be paid by Respondents 2 to 5 to the appellant
along with carrying cost at LPS rates. While the Appellant
shall not be entitled for carrying cost (much less at LPS
rates), for the delay of 332 days in filing the Appeal, they
shall be given credit for the sum of Rs.5 lakhs paid by them
earlier as a condition for condoning the delay in filing the
Appeal, since they are now being denied carrying cost for
the said period of delay. The matter is remanded to the
Respondent-Commission to compute the amounts which
the Appellant is entitled to in terms of this Judgment. The
Appeal is disposed of accordingly.”
8. When the appeal was filed before this Court, it was entertained,
limiting its scope only to the interpretation of Article 10.2.1 vis-à-vis
10.5 of the PPA, with specific reference to 10.5.1 (ii). The following
is the order passed by this Court on 09.09.2024:
“We have heard learned senior counsel for the parties
at length.
Most of the issues raised in the present matter are covered
by earlier decisions of this Court in ‘GMR Warora Energy
Ltd. v. CERC & Ors.’, (2023) 10 SCC 401, ‘UHBVNL v.
Adani Power (Mundra) Limited’, (2023) 2 SCC 624,
‘UHBVNL v. Adani Power Limited’, (2019) 5 SCC 325 and
‘MSEDCL v. MERC & Ors.’, (2022) 4 SCC 657. We may
note that the delay in refiling has been duly considered
earlier by the APTEL while condoning it. The said order
has attained finality.
The only issue which might arise for consideration
in this appeal pertains to the interpretation of Article
10.2.1 vis-à-vis Article 10.5 of the PPA with specific
reference to 10.5.1 (ii).
Learned senior counsel for the respondents seeks and is
granted two weeks’ time to file a counter affidavit.
Rejoinder affidavit shall be filed within a period of two
weeks thereafter.
List on 26.11.2024.”
(emphasis supplied)
2492 [2025] 5 S.C.R.
Supreme Court Reports
SUBMISSIONS ON BEHALF OF THE APPELLANTS
9. Notwithstanding the aforesaid order passed on 09.09.2024, the
learned Senior Counsel and learned Counsel appearing for the
appellants, made elaborate submissions on the other issues as well.
It is submitted that the delay has occasioned only due to the fault
of respondent No.1 through the litigation process and, therefore,
what is to be applied is Article 10.5.1 (ii). The APTEL was wrong in
condoning the delay by allowing the applications filed by respondent
No.1. There is no basis for awarding carrying cost at the rate of LPS,
and the APTEL ought not to have awarded the same as the LPS is
granted only when there is a delay in the payment of a supplementary
bill. The learned Senior Counsel placed substantial reliance on the
PPA to contend that it is respondent No.1 who did not raise the
supplementary bill at the earliest point of time, as mandated under
Article 8 of the PPA. The decision rendered by this Court in GMR
Warora (supra) does not apply to the case of respondent No.1,
considering that in the said case, a supplementary bill was indeed
raised. Unless a demand is raised, there is no question of payment
that would arise, as there is a clear distinction between the liability to
pay, as against an obligation to pay. In support of his contention, the
learned Senior Counsel has also placed reliance upon the decision
of this Court in Prem Cottex v. Uttar Haryana Bijli Vitran Nigam
Ltd., (2021) 20 SCC 200.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
10. The learned Senior Counsel Dr. Abhishek Manu Singhvi appearing
for the respondent No. 1, submits that there exists a preliminary
objection as arguments have been made by the appellants beyond
the scope of not only the present appeal but also the order, dated
09.09.2024, of this Court. The issues sought to be raised by the
appellants have already been settled by this Court in not only GMR
Warora (supra) but also in two other decisions of this Court in Uttar
Haryana Bijli Vitran Nigam Ltd. v. Adani Power Ltd., (2019) 5 SCC
325 (hereinafter referred to as “UHBVNL 2019”) and Uttar Haryana
Bijli Vitran Nigam Ltd. v. Adani Power (Mundra) Ltd., (2023) 2
SCC 624 (hereinafter referred to as “UHBVNL 2023”).
11. There is no question of raising a supplementary bill earlier, in view
of the definite stand taken by the appellants on the notification
[2025] 5 S.C.R. 2493
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
made by respondent No.1 on 20.12.2017. It is nobody’s case that
the appellants were going to honour the bill if raised at the earliest
point of time, as contended by them. The APTEL itself has held that
respondent No.1 is not entitled to carrying cost for the period of delay
in filing the appeal. The orders passed on that count have attained
finality. The appellants are making a futile attempt at reopening the
issues which are closed. Thus, it is a fit case where the appeal has
to be dismissed with costs, particularly when appropriate orders have
been passed by the RERC in pursuance of the order of remand
made by the APTEL.
12. Before we deal with the submissions made by the parties, we deem
it appropriate to discuss and elaborate on the scope of appeals
under the 2003 Act.
SCOPE OF APPEALS UNDER THE ELECTRICITY ACT, 2003
13. Whenever a statute provides for an appeal, a Court is expected to
restrain itself to the contours of the powers conferred under it. The
nature and status of the Court loses its significance as it only draws
its powers from the statute alone, and not beyond. After all, judicial
restraint and sobriety, when consciously restricted by the Legislature,
forms an integral part of the duties and functions of the Court.
Section 111 of the 2003 Act
“111. Appeal to Appellate Tribunal.— (1) Any person
aggrieved by an order made by an adjudicating officer
under this Act (except under Section 127) or an order
made by the Appropriate Commission under this Act may
prefer an appeal to the Appellate Tribunal for Electricity:
Provided that any person appealing against the order of
the adjudicating officer levying any penalty shall, while filing
the appeal, deposit the amount of such penalty:
Provided further that where in any particular case, the
Appellate Tribunal is of the opinion that the deposit of such
penalty would cause undue hardship to such person, it may
dispense with such deposit subject to such conditions as it
may deem fit to impose so as to safeguard the realisation
of penalty.
2494 [2025] 5 S.C.R.
Supreme Court Reports
(2) Every appeal under sub-section (1) shall be filed
within a period of forty-five days from the date on which
a copy of the order made by the adjudicating officer or
the Appropriate Commission is received by the aggrieved
person and it shall be in such form, verified in such manner
and be accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may entertain an
appeal after the expiry of the said period of forty-five days
if it is satisfied that there was sufficient cause for not filing
it within that period.
(3) On receipt of an appeal under sub-section (1), the
Appellate Tribunal may, after giving the parties to the
appeal an opportunity of being heard, pass such orders
thereon as it thinks fit, confirming, modifying or setting
aside the order appealed against.
(4) The Appellate Tribunal shall send a copy of every order
made by it to the parties to the appeal and to the concerned
adjudicating officer or the Appropriate Commission, as the
case may be.
(5) The appeal filed before the Appellate Tribunal under
sub-section (1) shall be dealt with by it as expeditiously
as possible and endeavour shall be made by it to dispose
of the appeal finally within one hundred and eighty days
from the date of receipt of the appeal:
Provided that where any appeal could not be disposed of
within the said period of one hundred and eighty days, the
Appellate Tribunal shall record its reasons in writing for
not disposing of the appeal within the said period.
(6) The Appellate Tribunal may, for the purpose of
examining the legality, propriety or correctness of any
order made by the adjudicating officer or the Appropriate
Commission under this Act, as the case may be, in relation
to any proceeding, on its own motion or otherwise, call for
the records of such proceedings and make such order in
the case as it thinks fit.”
[2025] 5 S.C.R. 2495
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
Section 125 of the 2003 Act
“125. Appeal to Supreme Court.—Any person aggrieved
by any decision or order of the Appellate Tribunal, may,
file an appeal to the Supreme Court, within sixty days
from the date of communication of the decision or order
of the Appellate Tribunal, to him, on any one or more of
the grounds specified in Section 100 of the Code of Civil
Procedure, 1908 (5 of 1908):
Provided that the Supreme Court may, if it is satisfied that
the appellant was prevented by sufficient cause from filing
the appeal within the said period, allow it to be filed within
a further period not exceeding sixty days.”
Section 100 of the Code of Civil Procedure, 1908
“100. Second appeal.— (1) Save as otherwise expressly
provided in the body of this Code or by any other law for
the time being in force, an appeal shall lie to the High
Court from every decree passed in appeal by any Court
subordinate to the High Court, if the High Court is satisfied
that the case involves a substantial question of law.
(2) An appeal may lie under this section from an appellate
decree passed ex- parte.
(3) In an appeal under this section, the memorandum of
appeal shall precisely state the substantial question of law
involved in the appeal.
(4) Where the High Court is satisfied that a substantial
question of law is involved in any case, it shall formulate
that question.
(5) The appeal shall be heard on the question so formulated
and the respondent shall, at the hearing of the appeal,
be allowed to argue that the case does not involve such
question:
Provided that nothing in this sub-section shall be deemed
to take away or abridge the power of the Court to hear, for
reasons to be recorded, the appeal on any other substantial
2496 [2025] 5 S.C.R.
Supreme Court Reports
question of law, not formulated by it, if it is satisfied that
the case involves such question.”
14. Under Section 111 of the 2003 Act, the APTEL is vested with all the
powers that can possibly be exercised by the Regulatory Commission.
In other words, it is the final Court of fact and law.
15. However, under Section 125 of the 2003 Act, the powers expected
to be exercised by this Court is circumscribed and controlled by the
pari materia provision contained under Section 100 of the Code of
Civil Procedure, 1908 (hereinafter referred to as “the CPC”). Thus,
it is axiomatic that an appellant has to raise a substantial question
of law, which if the Court finds to be in existence, shall accordingly
frame it in whatever manner it deems fit and proper, and put it to the
other side to respond. It is for this Court to ultimately consider the
existence of a substantial question of law and if it does so, answer it
accordingly. We will only clarify that there is no bar for this Court to
add any number of substantial questions of law even after framing
one earlier, in which case the respondents will have to be given due
notice of the same.
16. Section 100 of the CPC, after its amendment in the year 1978,
consciously concerns itself with a question of law which shall be
substantial in nature. Therefore, a mere question of law would not
be sufficient enough to entertain an appeal under Section 125 of
the 2003 Act. Added to that, it should be such that the substantial
question of law, if answered in the affirmative in favour of the appellant,
shall have the effect of reversing the decision of the APTEL. While
deciding a substantial question of law, this Court shall do so, based
upon the findings of fact rendered by the APTEL, unless by way of an
exception, a perversity is found thereunder. In a case where a finding
is rendered contrary to the records, without assigning any reason,
and/or on a total misconception of the fact seen apparently on the
face of the record, may in a given case, give rise to a substantial
question of law. Suffice it is to state that a substantial question of law
has to be framed by this Court in exercise of the power under Section
125 of the 2003 Act and, thereafter, to be answered accordingly.
17. In the facts of the instant case, we have indeed framed only
one substantial question of law vide order dated 09.09.2024, as
aforementioned. Though we did permit the appellants to raise all the
other issues and considered them as not feasible, the fact remains
that they do not constitute substantial questions of law.
[2025] 5 S.C.R. 2497
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
DISCUSSION
18. The issue with respect to change in law over a notification issued by
a public authority and the resultant date to be reckoned has indeed
attained finality pursuant to the judgments delivered by this Court
in GMR Warora Energy Ltd. (supra), UHBVNL 2019 (supra) and
UHBVNL 2023 (supra).
GMR Warora Energy Ltd. v. CERC (2023) 10 SCC 401
“95. For appreciating the rival submissions, we will have
to construe the term “Law”, which has been defined in the
PPAs, which reads thus:
“ “Law” means, in relation to this Agreement,
all laws including Electricity laws in force in
India and any statute, ordinance, regulation,
notification or code, rule, or any interpretation
of any of them by an Indian Governmental
Instrumentality and having force of law and
shall further include all applicable rules,
regulations, orders, notifications by an Indian
Governmental Instrumentality pursuant to
or under any of them and shall include all
rules, regulations, decisions and orders of
CERC and MERC.”
96. Perusal of the definition of the term “Law” itself would
clearly show that the term “Law” would mean all laws
including Electricity laws in force in India and any statute,
ordinance, regulation, notification or code, rule, or any
interpretation of any of them by an Indian governmental
instrumentality and having force of law. It would further
reveal that the term “Law” shall also include all
applicable rules, regulations, orders, notifications by
an Indian governmental instrumentality and shall also
include all rules, regulations, decisions and orders of
CERC and MERC.
97. In any case, the issue as to what would amount
to “Law” is no more res integra. This Court, in Energy
Watchdog [Energy Watchdog v. CERC, (2017) 14 SCC
2498 [2025] 5 S.C.R.
Supreme Court Reports
80 : (2018) 1 SCC (Civ) 133] , has observed thus : (SCC
p. 131, para 57)
“57. Both the letter dated 31-7-2013 and the
revised Tariff Policy are statutory documents
being issued under Section 3 of the Act and
have the force of law. This being so, it is clear
that so far as the procurement of Indian coal is
concerned, to the extent that the supply from
Coal India and other Indian sources is cut down,
the PPA read with these documents provides
in Clause 13.2 that while determining the
consequences of change in law, parties shall
have due regard to the principle that the
purpose of compensating the party affected
by such change in law is to restore, through
monthly tariff payments, the affected party
to the economic position as if such change
in law has not occurred. Further, for the
operation period of the PPA, compensation for
any increase/decrease in cost to the seller shall
be determined and be effective from such date
as decided by the Central Electricity Regulation
Commission. This being the case, we are of
the view that though change in Indonesian law
would not qualify as a change in law under the
guidelines read with the PPA, change in Indian
law certainly would.”
98. The aforesaid view of this Court taken in Energy
Watchdog [Energy Watchdog v. CERC, (2017) 14 SCC 80 :
(2018) 1 SCC (Civ) 133] has been approved by a Bench
of three learned Judges of this Court in Adani Rajasthan
case [Jaipur Vidyut Vitaran Nigam Ltd. v. Adani Power
Rajasthan Ltd., (2021) 18 SCC 478] and also followed by
this Court when the two linked matters out of this batch of
appeals were decided by this Court in Maharashtra State
Electricity Distribution Co. Ltd. v. Adani Power Maharashtra
Ltd. [(2023) 7 SCC 401] It cannot be denied that CIL
is an instrumentality of the Government of India and
its orders, insofar as price of fuel is concerned, are
binding on all its subsidiaries.
[2025] 5 S.C.R. 2499
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
***
100. As discussed hereinabove, the term “Law”
would also include all applicable rules, regulations,
orders, notifications issued by an Indian governmental
instrumentality.
101. It would thus be clear that all such additional
charges which are payable on account of orders,
directions, notifications, regulations, etc. issued by the
instrumentalities of the State, after the cut-off date, will
have to be considered to be “change in law” events.
The generators would be entitled to compensation on
the restitutionary principle on such changes occurring
after the cut-off date.
***
111. Undisputedly, EFC was imposed by CIL vide its
Circular dated 19-12-2017.
112. As already discussed hereinabove, CIL is an
instrumentality of the State. It is thus clear that, on the
cut-off date, there was no requirement of EFC, which
has been brought into effect only on 19-12-2017. As
such, the circular of CIL dated 19-12-2017 would also
amount to “change in law”.
***
117. For considering the rival submissions, it will be
apposite to refer to the following articles, which are almost
common in most of the PPAs:
“11. Billing and payment.—
***
11.3. Payment of monthly bills.—
***
11.3.4. In the event of delay in payment of a
monthly bill by any procurer beyond its due
date, a late payment surcharge shall be payable
by the procurer to the seller at the rate of two
2500 [2025] 5 S.C.R.
Supreme Court Reports
(2) per cent in excess of the applicable SBAR
per annum, on the amount of outstanding
payment, calculated on a day-to-day basis (and
compounded with monthly rest), for each day
of the delay.
***
11.8. Payment of supplementary bill.—
11.8.1. Either party may raise a bill on the
other party (“supplementary bill”) for payment
on account of:
(i) Adjustments required by the Regional Energy
Account (if applicable);
(ii) Tariff payment for change in parameters,
pursuant to provisions in Schedule 5; or
(iii) Change in law as provided in Article 13 and
such bill shall be paid by the other party.
***
11.8.3. In the event of delay in payment of a
supplementary bill by either party beyond one
month from the date of billing, a late payment
surcharge shall be payable at same terms
applicable to the monthly bill in Article 11.3.4.”
118. A perusal of Article 11.3.4 of the PPA would reveal
that in the event of delay in payment of a monthly bill
by any procurer beyond its due date, a late payment
surcharge shall be payable by the procurer to the seller
@ of 2% in excess of the applicable State Bank Advance
Rate (“SBAR” for short) per annum, on the amount of
outstanding payment, calculated on a day-to-day basis
(and compounded with monthly rest), for each day of
the delay. Article 11.8 of the PPA deals with payment
of supplementary bill. It enables either party to raise a
supplementary bill on the other party for payment on
account of certain events. Clause (iii) of Article 11.8.1 of
the PPA deals with “change in law” as provided in Article
[2025] 5 S.C.R. 2501
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
13. It requires the bill to be paid by the other party. Article
11.8.3 of the PPA also provides that in the event of delay in
payment of a supplementary bill by either party beyond one
month from the date of billing, a late payment surcharge
shall be payable at same terms applicable to the monthly
bill in Article 11.3.4.
***
120. It could thus be seen that this Court in Adani Power
[Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power
Ltd., (2019) 5 SCC 325 : (2019) 2 SCC (Civ) 657] has
held that insofar as the “operation period” is concerned,
compensation for any increase/decrease in revenues or
costs to the seller is to be determined and effected from
such date as is decided by the appropriate Commission.
It has further been held that the compensation is only
payable for increase/decrease in revenue or cost to the
seller if it is in excess of an amount equivalent to 1% of
the letter of credit in aggregate for a contract year. It has
been held that restitutionary principles apply in case
a certain threshold limit is crossed. It has been held
that an inbuilt restitutionary principle compensates
the party affected by such “change in law” and the
affected party must be restored through monthly tariff
payment to the same economic position as if such
“change in law” had not occurred.
121. From the perusal of para 9 of Adani Power [Uttar
Haryana Bijli Vitran Nigam Ltd. v. Adani Power Ltd., (2019)
5 SCC 325 : (2019) 2 SCC (Civ) 657], it would also be
clear that in case the “change in law” happens to be
by way of adoption, promulgation, amendment, re-
enactment or repeal of the law or “change in law”,
it has to be effected from the date on which such
change occurs.
122. In this respect, it will also be apposite to refer to the
following observations of this Court in Maharashtra State
Electricity Distribution Co. Ltd. v. Maharashtra Electricity
Regulatory Commission [(2022) 4 SCC 657] : (SCC pp.
719-20, paras 173-78)
2502 [2025] 5 S.C.R.
Supreme Court Reports
“173. APTEL correctly found that: (Maharashtra Pradesh
Electricity Regulatory Commission case [Maharashtra State
Electricity Distribution Co. Ltd. v. Maharashtra Pradesh
Electricity Regulatory Commission, 2021 SCC OnLine
APTEL 13], SCC OnLine APTEL para 13)
‘13. … On the contrary, there is a conscious exclusion
regarding any suo motu change in the rate to be
applied while calculating LPS, it being incorrect to
argue on the assumption that the contract permits
automatic change in system.’
174. This Court is unable to accept Mr Singh’s submission
that the conclusion of APTEL that LPS is not tariff is
erroneous. The meaning of the expression tariff has to be
considered, and has rightly been considered by APTEL
in the context of the relevant provision of the power
purchase agreements. The dictionary meaning of tariff
may be charge. However, in Article 13 of Stage 1 and
Article 10 of Stage 2 power purchase agreements, tariff
means monthly tariff and tariff adjustment consequential
to change in law, is of monthly tariff in respect of supply
of electricity.
175. As argued by the respondent power generating
companies appearing through Mr Rohatgi, Mr Singhvi,
Mr Mukherjee and Ms Anand respectively, LPS is only
payable when payment against monthly bills is delayed
and not otherwise.
176. The object of LPS is to enforce and/or encourage
timely payment of charges by the procurer i.e. the
appellant. In other words, LPS dissuades the procurer
from delaying payment of charges. The rate of LPS
has no bearing or impact on tariff. Changes in the
basis of the rates of LPS do not affect the rate at
which power was agreed to be sold and purchased
under the power purchase agreements. The principle
of restitution under the change in law provisions
of the power purchase agreements are attracted in
respect of tariff.
[2025] 5 S.C.R. 2503
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
177. LPS cannot be equated with carrying cost or actual
cost incurred for the supply of power. The appellant has
a contractual obligation to make timely payment of the
invoices raised by the power generating companies,
subject, of course, to scrutiny and verification of the same.
Mr Mukul Rohatgi has a point that if the funding cost was
so much lesser than the rate of LPS, as contended by the
appellant, the appellant could have raised funds at a lower
rate of interest, made timely payment of the invoices raised
by the power generating companies, and avoided LPS.
178. The proposition that courts cannot rewrite a
contract mutually executed between the parties, is well
settled. The Court cannot, through its interpretative
process, rewrite or create a new contract between
the parties. The Court has to simply apply the terms
and conditions of the agreement as agreed between
the parties, as observed by this Court in Shree Ambica
Medical Stores v. Surat People’s Coop. Bank [(2020)
13 SCC 564] , para 20, cited by Ms Divya Anand. This
appeal is an attempt to renegotiate the terms of the PPA,
as argued by Ms Divya Anand as also other counsel. It is
well settled that courts cannot substitute their own view of
the presumed understanding of commercial terms by the
parties, if the terms are explicitly expressed. The explicit
terms of a contract are always the final word with regard to
the intention of the parties, as held by this Court in Nabha
Power Ltd. v. Punjab SPCL [(2018) 11 SCC 508 : (2018)
5 SCC (Civ) 1] , paras 45 & 72, cited by Ms Anand.”
(emphasis in original)
123. This Court has clearly held in Maharashtra State
Electricity Distribution Co. [Maharashtra State Electricity
Distribution Co. Ltd. v. Maharashtra Electricity Regulatory
Commission, (2022) 4 SCC 657] that the DISCOMS have
a contractual obligation to make timely payment of the
invoices raised by the power generating companies,
subject to scrutiny and verification of the same. This
Court has rejected the contention that the funding cost
2504 [2025] 5 S.C.R.
Supreme Court Reports
was much lesser than the rate of LPS. This Court has
reiterated the proposition that the courts cannot rewrite
a contract which is executed between the parties. This
Court has emphasised that it cannot substitute its own
view of the presumed understanding of commercial terms
by the parties, if the terms are explicitly expressed. It has
been held that the explicit terms of a contract are always
the final word with regard to the intention of the parties.
124. As already discussed hereinabove, Article 11.8 of the
PPA entitles either party to raise a supplementary bill on
the other party on account of “change in law” as provided
in Article 13 and such bills are required to be paid by the
either party. Article 11.8.3 of the PPA specifically provides
that in the event of delay in payment of a supplementary bill
by either party beyond one month from the date of billing,
a late payment surcharge shall be payable at the same
terms applicable to the monthly bill in Article 11.3.4. Article
11.3.4 of the PPA specifically provides a late payment
surcharge to be paid by the procurer to the seller @ of
2% in excess of the applicable SBAR per annum on the
amount of outstanding payment calculated on day-to-day
basis (and compounded with monthly rest), for each day
of the delay.
***
126. It is thus clear that this Court has reiterated
in Adani Power (Mundra) [Uttar Haryana Bijli Vitran
Nigam Ltd. v. Adani Power (Mundra) Ltd., (2023) 2 SCC
624 : (2023) 1 SCC (Civ) 31] that once carrying cost
has been granted, it cannot be urged that interest on
carrying cost should be calculated on simple interest
basis instead of compound interest basis. It has been
held that grant of compound interest on carrying cost
and that too from the date of the occurrence of the
“change in law” event is based on sound logic. It has
been held that it is aimed at restituting a party that
is adversely affected by a “change in law” event and
restore it to its original economic position as if such
a “change in law” event had not taken place.
[2025] 5 S.C.R. 2505
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
127. The argument that there is no provision in the
PPAs for payment of compound interest from the date
when the “change in law” event had occurred, has
been specifically rejected by this Court.
128. In view of this consistent position of law and application
of restitutionary principles and privity of contractual
obligations between the parties as contained in the PPAs,
we do not find that the view taken by the learned APTEL
with regard to carrying cost warrants interference.
***
177. It is further to be noted that this Court in Uttar Haryana
Bijli Vitran Nigam Ltd. v. Adani Power Ltd. [(2019) 5 SCC
325 : (2019) 2 SCC (Civ) 657], has specifically observed
that the “change in law” events will have to accrue
from the date on which rules, orders, notifications
are issued by the instrumentalities of the State. Even
in spite of this finding, the DISCOMS are pursuing
litigations after litigations.
178. We find that, when the PPA itself provides a
mechanism for payment of compensation on the
ground of “change in law”, unwarranted litigation,
which wastes the time of the Court as well as adds to
the ultimate cost of electricity consumed by the end-
consumer, ought to be avoided. Ultimately, the huge
cost of litigation on the part of DISCOMS as well as
the generators adds to the cost of electricity that is
supplied to the end-consumers.”
(emphasis supplied)
Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power (Mundra)
Ltd. (2023) 2 SCC 624
“20. It is clear that the restitutionary principles
encapsulated in Article 13.2 would take effect for
computing the impact of change in law. We see no
reason to interfere with the impugned judgment [Adani
Power (Mundra) Ltd. v. CERC, 2021 SCC OnLine APTEL
2506 [2025] 5 S.C.R.
Supreme Court Reports
67] , wherein it has been held by the Appellate Tribunal that
Respondent 1 Adani Power had started claiming change in
law event compensation in respect of installation of FGD
unit along with carrying cost, right from the year 2012 and
that it has approached several fora to get this claim settled.
Respondent 1 Adani Power finally succeeded in getting
compensation towards FGD unit only on 28-3-2018, but
the carrying cost claim was denied. The relief relating to
carrying cost was granted to Respondent 1 Adani Power by
the Appellate Tribunal vide order dated 13-4-2018 [Adani
Power Ltd. v. CERC, 2018 SCC OnLine APTEL 5] which
was duly tested by this Court and upheld on 25-2-2019
[Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power
Ltd., (2019) 5 SCC 325 : (2019) 2 SCC (Civ) 657]. Once
carrying cost has been granted in favour of Respondent
1 Adani Power, it cannot be urged by the appellants
that interest on carrying cost should be calculated on
simple interest basis instead of compound interest
basis. Grant of compound interest on carrying cost
and that too from the date of the occurrence of the
change in law event is based on sound logic. The idea
behind granting interest on carrying cost is not far to
see, it is aimed at restituting a party that is adversely
affected by a change in law event and restore it to its
original economic position as if such a change in law
event had not taken place.
21. In the instant case, Respondent 1 Adani Power had
to incur expenses to purchase the FGD unit and install
it in view of the terms and conditions of the environment
clearance given by the Ministry of Environment and
Forests, Union of India, in the year 2010. For this, it had
to arrange finances by borrowing from banks. The interest
rate framework followed by scheduled commercial banks
and regulated by Reserve Bank of India mandates that
interest shall be charged on all advances at monthly
rests. In this view of the matter, Respondent 1 Adani
Power is justified in stating that if the banks have
charged it interest on monthly rest basis for giving
loans to purchase the FGD unit, any restitution will
[2025] 5 S.C.R. 2507
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
be incomplete, if it is not fully compensated for the
interest paid by it to the banks on compounding basis.
22. We are of the opinion that interest on carrying
cost is nothing but time value for money and the
only manner in which a party can be afforded the
benefit of restitution in every which way. In the facts
of the instant case, the Appellate Tribunal was justified in
allowing interest on carrying cost in favour of Respondent
1 Adani Power for the period between the year 2014, when
the FGD unit was installed, till the year 2021. There was
no justification for the Central Commission to have
excluded the period between 2014 and 2018 and grant
relief from the date of the passing of the order i.e.
from 28-3-2018 [Adani Power Ltd. v. Uttar Haryana Bijli
Vitran Nigam Ltd., 2018 SCC OnLine CERC 8] to 2021;
nor is there any logic to such a segregation of timelines,
particularly when Respondent 1 Adani Power was prompt
in raising a claim on the appellants and pursuing its legal
remedies.
23. We are not persuaded by the submission made on
behalf of the appellants that since no fault is attributable
to them for the delay caused in determination of the
amount, they cannot be saddled with the liability to pay
interest on carrying cost; nor is there any substance
in the argument sought to be advanced that there is
no provision in the PPAs for payment of compound
interest from the date when the change in law event
had occurred.
24. The entire concept of restitutionary principles
engrained in Article 13 of the PPAs has to be read in
the correct perspective. The said principle that governs
compensating a party for the time value for money,
is the very same principle that would be invoked and
applied for grant of interest on carrying cost on account
of a change in law event. Therefore, reliance on Article
11.3.4 read with Article 11.8.3 on the part of the appellants
cannot take their case further. Nor does the decision in
2508 [2025] 5 S.C.R.
Supreme Court Reports
Priya Vart case [Priya Vart v. Union of India, (1995) 5
SCC 437] have any application to the facts of the present
case as the said case relates to payment of compensation
under the Land Acquisition Act and the interest that would
be payable in case of delayed payment of compensation.”
(emphasis supplied)
Uttar Haryana Bijli Vitran Nigam Ltd. v. Adani Power Ltd. (2019)
5 SCC 325
“9. It will be seen that Article 13.4.1 makes it clear
that adjustment in monthly tariff payment on account
of change in law shall be effected from the date of
the change in law [see sub-clause (i) of clause 4.1],
in case the change in law happens to be by way of
adoption, promulgation, amendment, re-enactment
or repeal of the law or change in law. As opposed to
this, if the change in law is on account of a change
in interpretation of law by a judgment of a Court or
Tribunal or governmental instrumentality, the case
would fall under sub-clause (ii) of clause 4.1, in which
case, the monthly tariff payment shall be effected from
the date of the said order/judgment of the competent
authority/Tribunal or the governmental instrumentality.
What is important to notice is that Article 13.4.1 is subject
to Article 13.2 of the PPAs.
10. Article 13.2 is an in-built restitutionary principle
which compensates the party affected by such change
in law and which must restore, through monthly tariff
payments, the affected party to the same economic
position as if such change in law has not occurred.
This would mean that by this clause a fiction is created,
and the party has to be put in the same economic
position as if such change in law has not occurred i.e.
the party must be given the benefit of restitution as
understood in civil law. Article 13.2, however, goes on
to divide such restitution into two separate periods. The
first period is the “construction period” in which increase/
decrease of capital cost of the project in the tariff is to be
governed by a certain formula. However, the seller has to
[2025] 5 S.C.R. 2509
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
provide to the procurer documentary proof of such increase/
decrease in capital cost for establishing the impact of
such change in law and in the case of dispute as to the
same, a dispute resolution mechanism as per Article 17
of the PPA is to be resorted to. It is also made clear that
compensation is only payable to either party only with
effect from the date on which the total increase/decrease
exceeds the amount stated therein.
11. So far as the “operation period” is concerned,
compensation for any increase/decrease in revenues or
costs to the seller is to be determined and effected from
such date as is decided by the appropriate Commission.
Here again, this compensation is only payable for increase/
decrease in revenue or cost to the seller if it is in excess
of an amount equivalent to 1% of the Letter of Credit in
aggregate for a contract year. What is clear, therefore,
from a reading of Article 13.2, is that restitutionary
principles apply in case a certain threshold limit is
crossed in both sub-clauses (a) and (b). There is no
dispute that the present case is covered by sub-clause
(b) and that the aforesaid threshold has been crossed.
The mechanism for claiming a change in law is then
set out by Article 13.3 of the PPA.
***
13. A reading of Article 13 as a whole, therefore, leads
to the position that subject to restitutionary principles
contained in Article 13.2, the adjustment in monthly tariff
payment, in the facts of the present case, has to be from
the date of the withdrawal of exemption which was done
by administrative orders dated 6-4-2015 and 16-2-2016.
The present case, therefore, falls within Article 13.4.1(i).
This being the case, it is clear that the adjustment in
monthly tariff payment has to be effected from the
date on which the exemptions given were withdrawn.
This being the case, monthly invoices to be raised by the
seller after such change in tariff are to appropriately reflect
the changed tariff. On the facts of the present case, it is
clear that the respondents were entitled to adjustment in
their monthly tariff payment from the date on which the
exemption notifications became effective. This being the
2510 [2025] 5 S.C.R.
Supreme Court Reports
case, the restitutionary principle contained in Article 13.2
would kick in for the simple reason that it is only after the
order dated 4-5-2017 [Adani Power Ltd. v. Uttar Haryana
Bijli Vitran Nigam Ltd., 2017 SCC OnLine CERC 66] that
CERC held that the respondents were entitled to claim
added costs on account of change in law w.e.f. 1-4-2015.
This being the case, it would be fallacious to say that the
respondents would be claiming this restitutionary amount
on some general principle of equity outside the PPA. Since
it is clear that this amount of carrying cost is only relatable
to Article 13 of the PPA, we find no reason to interfere
with the judgment of the Appellate Tribunal.”
(emphasis supplied)
19. Notwithstanding the aforesaid clear pronouncements of this Court, we
would like to throw a little more light on what constitutes a ‘change in
law’ event, in view of the persuasive submissions made by Mr. Shyam
Divan, the learned Senior Counsel appearing for the appellants.
20. While Article 10 of the PPA, with specific reference to Article 10.2,
deals with application and principles for computing impact of change
in law, Article 10.5, being a facet of Article 10.2 of the PPA, concerns
itself with tariff adjustment payment on account of change in law.
Article 10.2 and Article 10.5 of the PPA are extracted as below:
“10.2 Application and Principles for computing impact of
Change in Law
10.2.1 While determining the consequence of Change
in Law under this Article 10, the Parties shall have due
regard to the principle that the purpose of compensating
the Party affected by such Change in Law is to restore
through monthly Tariff Payment, to the extent contemplated
in this Article 10, the affected Party to the same economic
position as if such Change in Law has not occurred.
***
10.5 Tariff Adjustment Payment on account of Change
in Law
10.5.1 Subject to Article 10.2, the adjustment in monthly
Tariff Payment shall be effective from:
[2025] 5 S.C.R. 2511
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
(i) the date of adoption, promulgation, amendment, re-
enactment or repeal of the Law or Change in Law; or
(ii) the date of order/ judgment of the Competent Court
or tribunal or Indian Governmental Instrumentality, if the
Change in Law is on account of a change in interpretation
of Law.
10.5.2 The payment for Change in Law shall be through
Supplementary Bill as mentioned in Article 8.8. However,
in case of any change in Tariff by reason of Change in
Law, as determined in accordance with this Agreement, the
Monthly Invoice to be raised the Seller after such change
in Tariff shall appropriately reflect the changed Tariff.”
21. As held by this Court in the decisions referred to supra, Article
10.2.1 in the instant PPA was incorporated based on the principle of
restitution. The idea of this principle is to compensate the affected
party in order to restore it to the same economic position, but for the
change in law. This particular provision is a substantive one, which in
a normal circumstance, has to be given effect to in letter and spirit.
22. Article 10.5 of the PPA deals with tariff adjustment payment occasioned
on account of change in law. Under Article 10.5.1 (i) of the PPA, the
adjustment would start from the date of change in law. Therefore,
as a matter of course, the adjustment in monthly tariff payment shall
become effective from the date notified in the change in law.
23. Article 10.5.1 (ii) of the PPA might emerge in a factual scenario where
there is an adjudication by way of an order/judgment of a competent
Court or Tribunal or an Indian Governmental Instrumentality, as the
case may be. Rendering of an order/judgement would require an
interpretation of law. When there is a change in the interpretation
of law in rendering the order/judgement, the date of such an order/
judgment would constitute a ‘change in law’ under Article 10.5.1 (ii)
of the PPA.
24. Hence, a mere difference in the understanding of a ‘change in law’
by one party to the PPA, does not, by itself, preclude the other party
from deriving a benefit by invoking Article 10.5.1 (i) of the PPA. In
other words, a different understanding would not result in a different
interpretation of law, that would bar entitlement under Article 10.5.1
(i) of the PPA and, therefore, such a situation would not fall within
the purview of Article 10.5.1 (ii) of the PPA.
2512 [2025] 5 S.C.R.
Supreme Court Reports
25. To make this position clear, Article 10.5.1 (ii) of the PPA is not applicable
to the facts of the instant case since there is no change in law which
has occasioned by way of an interpretation given by a Court or a
Tribunal or an Indian Governmental Instrumentality. Recognising a
change in law is different from interpreting a notification as the one
applicable to the parties. We are only clarifying the position that
there is no change in the interpretation of law involved in the case
at hand, particularly when the said issue was not before the APTEL,
for which the author of the change in law should have been made a
party to the proceedings, in order to defend it. The Notification, dated
19.12.2017, and its application are not in dispute. What is in dispute
is whether it constitutes a change in law or not. So long as there is
no interpretation on the Notification with respect to its applicability
to the parties before us, Clause (ii) of Article 10.5.1 of the PPA will
have no application.
26. Article 10.5.2 of the PPA kicks in thereafter. Hence, a supplementary
bill has to be raised only after due adjudication by the competent
forum. Our view is fortified on a proper reading of Article 8 of the PPA.
“ARTICLE 8: BILLING AND PAYMENT
***
8.3 Payment of Monthly Bills
8.3.1 The Procurers shall pay the amount payable under
the Monthly Bill on the Due Date to such account of the
Seller, as shall have been previously notified by the Seller
in accordance with Article 8.3.4 below.
8.3.2 All payments made by the Procurer(s) shall be
appropriated by the Seller in the following order of priority:
i) towards Late Payment Surcharge, if any;
ii) towards the earlier unpaid Monthly Bill(s), if any; and
iii) towards the then current Monthly Bill.
***
8.3.5 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, on the amount of outstanding payment,
[2025] 5 S.C.R. 2513
Jaipur Vidyut Vitran Nigam Ltd. & Ors. v.
Adani Power Rajasthan Ltd. & Anr.
calculated on a day to day basis (and compounded with
monthly rest), for each day of the delay. The Late Payment
Surcharge shall be claimed by the Seller through the
Supplementary Bill.
***
8.6 Disputed Bill
8.6.1 If a Party does not dispute a Monthly Bill, Provisional
Bill or a Supplementary Bill raised by the other Party by
the Due Date, such Bill shall be taken as conclusive.
8.6.2 If a Party disputes the amount payable under a
Monthly Bill, Provisional Bill or a Supplementary Bill, as
the case may be, that Party shall, within thirty (30) days
of receiving such Bill, issue a notice (the “Bill Dispute
Notice”) to the invoicing Party setting out:
i) the details of the disputed amount;
ii) its estimate of what the correct amount should be; and
iii) all written material in support of its claim.
***
8.8 Payment of Supplementary Bill
8.8.1 Either Party may raise a bill on the other Party
(“Supplementary Bill”) for payment on account of:
i) Adjustments required by the Regional Energy Account
(if applicable);
ii) Tariff Payment for change in parameters, pursuant to
provisions in Schedule 4; or
iii) Change in Law as provided in Article 10,
and such Supplementary Bill shall be paid by the other
Party.
***
8.8.3 In the event of delay in payment of a Supplementary
Bill by either Party beyond its Due Date, a Late Payment
Surcharge shall be payable at the same terms applicable
to the Monthly Bill in· Article 8.3.5.”
2514 [2025] 5 S.C.R.
Supreme Court Reports
It is not in dispute that a supplementary bill is not a monthly bill. Article
8 of the PPA deals with billing and payment alone. Under Article 8.8, the
other party is duty-bound to make the payment when a supplementary
bill is raised due to a change in law event having occurred, as provided
under Article 10 of the PPA. This can happen only after due adjudication
by the competent forum, has taken place. For more clarity, one has to
read Article 10.5.2 along with Article 8.8 of the PPA. It is only thereafter
that Article 8.6 of the PPA might come into the picture when there exists
a dispute on the quantum of amount claimed in the supplementary bill
raised after the completion of due adjudication by the competent forum,
on the issue pertaining to the change in law.
27. The incidental issue raised with respect to carrying cost at the rate
of LPS has also been dealt with in the decisions referred to in GMR
Warora Energy Ltd. (supra), UHBVNL 2019 (supra) and UHBVNL
2023 (supra) and, therefore, any fresh consideration would only be
an academic exercise. We also find that the decision relied upon by
the learned Senior Counsel appearing on behalf of the appellants,
have no application to the facts of the case.
28. For the aforesaid reasons, we find absolutely no reason to interfere
with the impugned judgment. Liability has been fastened upon
the appellants under the agreement. The contention that the
supplementary bill ought to have been raised earlier and, therefore,
the payment can only be made thereafter has neither a factual basis
nor a legal one. We would only point out the fact that respondent
No.1 did notify the change in law event immediately on the very
next day of the notification having been issued. In any case, we
have been informed that in pursuance of the order of remand made
by the APTEL, further orders have been passed by the RERC on
19.06.2024, which has not been challenged before this Court.
29. In view of the aforesaid analysis, we find no merit in this appeal.
The appeal stands dismissed, accordingly.
30. Pending application(s), if any, shall stand disposed of.
Result of the case: Appeal dismissed.
†
Headnotes prepared by: Nidhi Jain
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