Supreme Court of India
Digital Supreme Court Reports
The Official Law Report Fortnightly ISSN: 3048-4839 (Online)
Home
Full Text

MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED vs. ADANI POWER MAHARASHTRA LIMITED & ORS.

SCR Citation: [2023] 8 S.C.R. 85
Year/Volume: 2023/ Volume 8
Date of Judgment: 03 March 2023
Petitioner: MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED
Disposal Nature: Appeal Dismissed
Neutral Citation: 2023 INSC 208
Judgment Delivered by: Hon'ble Mr. Justice Bhushan Ramkrishna Gavai
Respondent: ADANI POWER MAHARASHTRA LIMITED & ORS.
Case Type: CIVIL APPEAL /684/2021
Order/Judgment: Judgment
1. Headnote

Power – Long-term Power Purchase Agreements (PPAs) –Supply of coal to power producers – Change of New CoalDistributional Policy, 2007 (NCDP, 2007) by New CoalDistributional Policy, 2013 (NCDP 2013) – Claim for ‘Change inLaw’ relief compensation – Operating parameters – Held: In theEnergy Watchdog case as well as in Adani Rajasthan case, theSupreme Court held that on account of the Change in Law, thegenerating companies were entitled to compensation so as to restorethe party to the same economic position as if such Change in Lawhad not occurred – Had the Change in Law not occurred, thegenerating companies would have been entitled to the supply asassured by the Coal India Ltd. (CIL)/Coal Companies under theFuel Supply Agreement (FSA) – The submission that when the bidderssubmitted their bids, this was a risk they knowingly took, is withoutsubstance – The generators are not claiming compensation on thebasis of rise in price of coal or on the ground of force majeure –Their claims, in fact, are on the basis of the Change in Law, whichthis Court, in the case of Energy Watchdog as well as in AdaniRajasthan case, has upheld on the ground of Change in Law – Thecontention of the Distribution companies (DISCOMS) that the AdaniRajasthan case is not applicable to the facts of the present caseinasmuch as in Adani Rajasthan case, the State of Rajasthan hadassured 100% coal supply and that it was not a case of FSA, iswithout substance – In the present case also, the NCDP 2007 hadassured 100% fuel/coal supply of the normative value – Therestitutionary principle has been stated by this Court in the case ofUttar Haryana Bijli Vitran Nigam Limited (UHBVNL) – Undisputedly,the claim of respondent no.1-APML stands on the basis of the Changein Law – The DISCOMS, which are instrumentalities of the State,cannot be expected to argue contrary to the stand of the Government, which clearly provides that the generators would be entitled to passthroughfor the coal required to be imported or purchased from theopen market on the ground of Change in Law – The stand taken bythe DISCOMS that, since the loss being sustained by the generatingcompanies is on account of non-fulfillment of obligation by CIL/Coal Companies, they should be relegated to the remedy availableto them in law against the CIL/Coal Companies, is totallyunreasonable – The claim is based on change of NCDP 2007 byNCDP 2013, which, undisputedly, is covered by the term ‘Changein Law’ – Compensation – ‘Change in law’ compensation.Judicial Review – Of decision taken by expert bodies – CentralElectricity Authori ty (CEA), Central Electricity RegulatoryCommission (CERC) and Appellate Tribunal for Electricity (APTEL)–Held: – These bodies are bodies consisting of experts in the field– Courts should be slow in interfering with the decisions taken bythe experts in the field and unless it is found that the expert bodieshave failed to take into consideration the mandatory statutoryprovisions or the decisions taken are based on extraneousconsiderations or they are ex facie arbitrary and illegal, it will notbe appropriate for the Court to substitute its views with that of theexpert bodies.Electricity Act, 2003 – Purpose and Object – One of the majorreasons for the enactment of the Electricity Act was the deteriorationin performance of the State Electricity Boards – It is seen that in anumber of matters, concurrent orders passed by the Regulatory Bodyand the Appellate Forum are assailed – Such litigation would, infact, efface the purpose of the Electricity Act.

2. Case referred
3. Act
  • Electricity Act, 2003 (36 of 2003)
4. Keyword
  • Long-term Power Purchase Agreements (PPAs
  • – Supply of coal to power producers
  • Judicial Review
  • Of decision taken by expert bodies