# Haryana Power Purchase Centre (HPPC) and Others v. GMR Kamalanga Energy Limited and Others

- **Citation:** 2025 INSC 1079
- **Court:** Supreme Court of India
- **Decided:** 2025-09-08
- **Case number:** Civil Appeal No. 1929 of 2020
- **Bench:** B.R. Gavai, K. Vinod Chandran
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/haryana-power-purchase-centre-hppc-and-others-v-gmr-kamalanga-energy-limited-38723
- **Pages:** 40

## Headnote

The APTEL dismissed the appeals (Appeal no.135 of 2018 along
with Appeal no.54 of 2019) and upheld the order dated 20.03.2018
passed by the Central Electricity Regulatory Commission (CERC)
in Petition No.105/MP/20173.
Headnotes†
Electricity Act, 2003 - Electricity Appeals - When experts
bodies like the CERC, the APTEL and the Central Electricity
Authority have taken a particular view:
Held: When various expert bodies like the CERC, the APTEL
and the Central Electricity Authority after considering the relevant
material on record have taken a particular view, the Court should
be slow in interfering with the decisions taken by them - Unless
the Court finds that the expert bodies have failed to take into
consideration the mandatory statutory provisions or if their decisions
are based on extraneous considerations or they are ex facie arbitrary
and illegal, it will not be appropriate for this Court to substitute its
views with that of the expert bodies. [Para 20]
Electricity Act, 2003 - s.125 - Code of Civil Procedure, 1908 -
s.100 - Appeal u/s.125, when permissible:
Held: The appeal u/s.125 of the 2003 Act is only permissible on
any of the grounds as specified in s.100 of the CPC - As such,
it is permissible only on substantial questions of law. [Para 23]
Electricity Act, 2003 - ss.79, 125 - The two instant appeals
challenge the same judgment and final order of the APTEL -
The first appeal being Civil Appeal No. 1929 of 2020 has been
* Author
664
[2025] 9 S.C.R.
Supreme Court Reports
filed by Haryana Power Purchase Centre and two others
(HPPC) whereas the second appeal being Civil Appeal No.3429
of 2020 has been filed by one GRIDCO - Earlier, Petition
No.79/2013 came to be filed by GKEL-respondent no.1 before
CERC against the Haryana Utilities for compensation due to
force majeure events and change in law during the operation
period - In the said petition, the GKEL-respondent no.1 sought
adjustment of tariff on account of events of Change in Law
which affected the power project during the operation period
in order to restore GKEL to the same economic position that
it would have been in if the concerned events had never
occurred - CERC vide order dt. 03.02.2016 disposed of the
said petition by allowing all such claims which fell within the
parameters of Change in Law events - GKEL had preferred a
similar petition being Petition No.112/MP/2015 against Bihar
Utilities, the CERC vide order dt. 07.04.2017 disposed of the
petition by allowing all such claims - The CERC vide another
order dated 20.03.2018 disposed of the Petition No. 105 by
directing the Haryana Utilities to pay the supplementary bills
raised by GKEL - Appeals before the APTEL - The APTEL
vide the common judgment and final order dated 20.12.2019
dismissed both the appeals and upheld the order of the
CERC - Correctness:
Held: In the first Appeal No. 1929 of 2020, there are concurrent
findings of facts not only in the impugned judgment passed by the
APTEL and the order passed by the CERC in Petition No.105,
but also in the order dated 03.02.2016 passed by the CERC in
Petition No.79 during the first round of litigation - The Court will,
therefore, have to be very slow in interfering with the said findings
of fact - Unless it is found that the findings are perverse, arbitrary
or in violation of the statutory provisions, it will not be permissible
for this Court to interfere with the same - Also, this Court does
not find any substantial question of law arises for consideration
in the present appeal - The petition was filed by GKEL seeking
relief on account of Change in Law on various grounds - One
of the grounds was with regard to deviations from the New Coal
Distribution Policy, 2007 (the NCDP) and changes in coal distribution
policy of the Government of India and Coal India Limited - The
perusal of paragraphs 54, 55 and 73 of the order passed by the
CERC dated 03.02.2016 would reveal that it devised a formula
for computing the Energy Charge Rate which required pro rata
[202

## Text

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[2025] 9 S.C.R. 663 : 2025 INSC 1079
Haryana Power Purchase Centre (HPPC) and Others
v.
GMR Kamalanga Energy Limited and Others
(Civil Appeal No. 1929 of 2020)
08 September 2025
[B.R. Gavai,* CJI and K. Vinod Chandran, J.]
Issue for Consideration
The APTEL dismissed the appeals (Appeal no.135 of 2018 along
with Appeal no.54 of 2019) and upheld the order dated 20.03.2018
passed by the Central Electricity Regulatory Commission (CERC)
in Petition No.105/MP/20173.
Headnotes†
Electricity Act, 2003 - Electricity Appeals - When experts
bodies like the CERC, the APTEL and the Central Electricity
Authority have taken a particular view:
Held: When various expert bodies like the CERC, the APTEL
and the Central Electricity Authority after considering the relevant
material on record have taken a particular view, the Court should
be slow in interfering with the decisions taken by them - Unless
the Court finds that the expert bodies have failed to take into
consideration the mandatory statutory provisions or if their decisions
are based on extraneous considerations or they are ex facie arbitrary
and illegal, it will not be appropriate for this Court to substitute its
views with that of the expert bodies. [Para 20]
Electricity Act, 2003 - s.125 - Code of Civil Procedure, 1908 -
s.100 - Appeal u/s.125, when permissible:
Held: The appeal u/s.125 of the 2003 Act is only permissible on
any of the grounds as specified in s.100 of the CPC - As such,
it is permissible only on substantial questions of law. [Para 23]
Electricity Act, 2003 - ss.79, 125 - The two instant appeals
challenge the same judgment and final order of the APTEL -
The first appeal being Civil Appeal No. 1929 of 2020 has been
* Author
664
[2025] 9 S.C.R.
Supreme Court Reports
filed by Haryana Power Purchase Centre and two others
(HPPC) whereas the second appeal being Civil Appeal No.3429
of 2020 has been filed by one GRIDCO - Earlier, Petition
No.79/2013 came to be filed by GKEL-respondent no.1 before
CERC against the Haryana Utilities for compensation due to
force majeure events and change in law during the operation
period - In the said petition, the GKEL-respondent no.1 sought
adjustment of tariff on account of events of Change in Law
which affected the power project during the operation period
in order to restore GKEL to the same economic position that
it would have been in if the concerned events had never
occurred - CERC vide order dt. 03.02.2016 disposed of the
said petition by allowing all such claims which fell within the
parameters of Change in Law events - GKEL had preferred a
similar petition being Petition No.112/MP/2015 against Bihar
Utilities, the CERC vide order dt. 07.04.2017 disposed of the
petition by allowing all such claims - The CERC vide another
order dated 20.03.2018 disposed of the Petition No. 105 by
directing the Haryana Utilities to pay the supplementary bills
raised by GKEL - Appeals before the APTEL - The APTEL
vide the common judgment and final order dated 20.12.2019
dismissed both the appeals and upheld the order of the
CERC - Correctness:
Held: In the first Appeal No. 1929 of 2020, there are concurrent
findings of facts not only in the impugned judgment passed by the
APTEL and the order passed by the CERC in Petition No.105,
but also in the order dated 03.02.2016 passed by the CERC in
Petition No.79 during the first round of litigation - The Court will,
therefore, have to be very slow in interfering with the said findings
of fact - Unless it is found that the findings are perverse, arbitrary
or in violation of the statutory provisions, it will not be permissible
for this Court to interfere with the same - Also, this Court does
not find any substantial question of law arises for consideration
in the present appeal - The petition was filed by GKEL seeking
relief on account of Change in Law on various grounds - One
of the grounds was with regard to deviations from the New Coal
Distribution Policy, 2007 (the NCDP) and changes in coal distribution
policy of the Government of India and Coal India Limited - The
perusal of paragraphs 54, 55 and 73 of the order passed by the
CERC dated 03.02.2016 would reveal that it devised a formula
for computing the Energy Charge Rate which required pro rata
[2025] 9 S.C.R.
665
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
allocation of coal among all three DISCOMS - It is pertinent to
note that the Haryana Utilities did not challenge the said order and
paid the amounts due - The perusal of the aforesaid judgment and
orders (CERC and APTEL) would reveal that they are based upon
interpretation of various documents - Considering the concurrent
findings of fact by the CERC on two different occasions and
the APTEL in impugned order and also taking into note of the
communication dated 02.02.2022 issued by MCL, this Court sees
no merit in the appeal of Haryana Utilities - In the second appeal
being Civil Appeal No.3429 of 2020 by GRIDCO is concerned, the
main contention of GRIDCO is that the order dated 03.02.2016
in Petition No.79 and order dated 20.03.2018 in Petition No.105
were passed without impleading GRIDCO - It will be relevant to
note that the PPA with GRIDCO is u/s.62 of the 2003 Act whereas
the PPAs with the Haryana Utilities and Bihar Utilities are u/s.63
of the 2003 Act - As such there was no occasion for GKEL to
implead GRIDCO as a party to the said petitions - Earlier, while
considering the appeal of Haryana Utilities, this Court has already
upheld the concurrent findings of the CERC and the APTEL that
the coal supply from all the sources has to be apportioned amongst
all the three DISCOMS in proportion to the energy supplied to
them - None of the DISCOMS can claim a priority for supply of
power based either on the prior date of agreement or the recital
as to the source of coal - There is no merit in the present appeal
as well - Appeals dismissed. [Paras 24, 28, 31, 34, 40, 41, 45]
Case Law Cited
Maharashtra State Electricity Distribution Company Limited v. Adani
Power Maharashtra Limited and Others [2023] 7 SCR 648 : (2023)
7 SCC 401 - relied on.
GMR Warora Energy Limited v. Central Electricity Regulatory
Commission (CERC) and Others [2023] 8 SCR 183 : (2023) 10
SCC 401; Uttar Haryana Bijli Vitran Nigam Ltd. & Another v. Adani
Power (Mundra) Limited and Others [2023] 5 SCR 468 : (2023)
14 SCC 736; Energy Watchdog v. Central Electricity Regulatory
Commission and Others [2017] 3 SCR 153 : (2017) 14 SCC
80 - referred to.
GMR-Kamalanga Energy Limited v. Dakshin Haryana Bijli Vitran
Nigam Ltd., 2016 SCC OnLine CERC 43 - referred to.
666
[2025] 9 S.C.R.
Supreme Court Reports
List of Acts
Electricity Act, 2003; Finance Act 2010; Code of Civil Procedure,
1908; New Coal Distribution Policy, 2007; CERC (Terms and
Conditions of Tariff) Regulations, 2009.
List of Keywords
Concurrent findings of CERC and APTEL; Electricity Appeals;
Section 100 of Code of Civil Procedure, 1908; Priority for supply of
power; Force majeure events; Change in law during the operation
period; Substantial question of law; Second appeal; Computing the
Energy Charge Rate; None of the DISCOMS can claim a priority;
Power purchase agreement; Pro rata allocation of coal; Slow in
interfering; Expert bodies.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1929 of 2020
From the Judgment and Order dated 20.12.2019 of the Appellate
Tribunal for Electricity at New Delhi in AN No. 135 of 2018
With
Civil Appeal No. 3429 of 2020
Appearances for Parties
Advs. for the Appellants:
M.G. Ramachandran, C. Aryama Sundaram, Sr. Advs., Ms. Poorva
Saigal, Shubham Arya, Nikunj Dayal, Ms. Pallavi Saigal, Abhishek
Gupta, Harshwardhan Singh, Raj Kumar Mehta, Ms. Himanshi
Andley.
Advs. for the Respondents:
Dr. Abhishek Manu Singhvi, Damma Seshadri Naidu, S.B.
Upadhyay, Sr. Advs., Vishrov Mukerjee, Pukhrambam Ramesh
Kumar, Yashaswi Kant, Ms. Juhi Senguttuvan, Ms. Priyanka
Vyas, L. Nidhiram Sharma, Avishkar Singhvi, Karun Sharma,
Ms. Rajkumari Divyasana, Vishrov Mukerjee, Pukhrambam Ramesh
Kumar, Yashaswi Kant, Ms. Juhi Senguttuvan, Ms. Priyanka Vyas,
L. Nidhiram Sharma, Avishkar Singhvi, Karun Sharma,
Ms. Rajkumari Divyasana, Ms. Prerna Singh, Ravi Kishore, Guntur
Prabhakar, Raj Kumar Mehta, Ms. Himanshi Andley, Nishant Kumar,
Abhinav Kathulia, Ms. Anisha Upadhyay.
[2025] 9 S.C.R.
667
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, CJI.
FACTUAL ASPECTS
1.
These appeals take exception to the judgment and final order dated
20th December 2019 passed by the Appellate Tribunal for Electricity,
New Delhi1 in Appeal No. 135 of 2018 along with Appeal No. 54
of 2019, whereby the learned APTEL dismissed the said appeals
and upheld the order dated 20th March 2018 passed by the Central
Electricity Regulatory Commission, New Delhi2 in Petition No. 105/
MP/20173.
2.
We have two appeals before us, both of which challenge the same
judgment and final order of the learned APTEL. The first appeal
being Civil Appeal No. 1929 of 2020 has been filed by Haryana
Power Purchase Centre and two others4 whereas the second appeal
being Civil Appeal No. 3429 of 2020 has been filed by one GRID
Corporation of Orissa Limited5. For the sake of clarity and to avoid any
confusion, the parties will be referred to according to their positions
in the first of the two civil appeals.
3.
Before we proceed with the facts of the case, it would be apposite
to give a brief overview of the parties before us.
3.1 HPCC (Appellant No.1) is the nodal agency for the procurement
of power on behalf of the distribution licensees in the State of
Haryana, being Dakshin Haryana Bijli Vitran Nigam Limited
(Appellant No.2) and Uttar Haryana Bijli Vitran Nigam Limited
(Appellant No.3). Haryana Power Generation Corporation
Limited (Proforma Respondent No.6) is the body corporate
that was responsible for the initiation of the competitive bid
process on behalf of Appellant Nos. 2 and 3 for procurement
1
Hereinafter referred to as the 'APTEL'
2
Hereinafter referred to as the 'CERC'
3
Hereinafter referred to as 'Petition No. 105'
4
Hereinafter referred to as the 'HPCC'
5
Hereinafter referred to as 'GRIDCO'
668
[2025] 9 S.C.R.
Supreme Court Reports
of power in the State of Haryana. Together, the said parties
may be referred to as the "Haryana Utilities".
3.2 GMR Kamalanga Energy Limited6 (Respondent No.1) is a
generating company within the meaning of the Electricity Act,
20037. Notably, GKEL is a special purpose vehicle of GMR
Energy Limited8 which was the predecessor-in-interest of the
Respondent No.1.
3.3 PTC India Limited9 (Respondent No.2) is a trading licensee
within the meaning of the 2003 Act. Respondent No. 2 had an
arrangement with GKEL for the procurement of power.
3.4 CERC (Respondent No.3) is the regulatory commission under
the 2003 Act.
3.5 GRIDCO (Respondent No.4) is a licensee under the 2003 Act
which is responsible for procuring power for supply within the
State of Odisha.
3.6 Similarly, Bihar State Power (Holding) Company10 (Respondent
No.5) is a licensee under the 2003 Act which is responsible for
procuring power for supply within the State of Bihar.
4.
Having given a brief overview of the parties in the civil appeals, we
may now proceed to examine the facts which lead to the present
appeals. The facts are as follows:-
4.1 With the intention to set up a thermal power plant of about 1,000
MW comprising of two units of about 500 MW each at village
Kamalanga, Dhenkanal in the State of Odisha, GEL entered into
a Memorandum of Understanding (MoU) with the Government of
Odisha on 9th June 2006. Per the terms of the MoU, the power
project as envisaged was to operate with coal as the primary
fuel, for which purpose the State of Odisha was to either allot
coal blocks upon receipt of sanction from the Government of
India or allot long-term coal linkage of such quality and quantity
6
Hereinafter referred to as 'GKEL'
7
Hereinafter referred to as the '2003 Act'
8
Hereinafter referred to as 'GEL'
9
Hereinafter referred to as 'PTC'
10
Hereinafter referred to as 'Bihar Utilities'
[2025] 9 S.C.R.
669
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
as required for the project. The MoU further necessitated that
a nominated agency authorized by the Government of Odisha
would have the right to purchase up to 25% of power sent
out from the thermal power plants. While initially, the MoU
envisaged the setting up of thermal plants with an aggregate
capacity of 1,000 MW (500 x 2), by way of alteration carried
out subsequently, it was decided that GKEL would develop
four power plants each having a capacity of 350 MW. Three
out of the four said units have been installed, however, the
fourth unit of 350 MW is yet to be installed. Subsequently, this
project was accorded the Mega Power Project status by the
Ministry of Power, Government of India vide its letter dated 1st
February 2012.
4.2 In terms of the MoU, on 28th September 2006, GKEL executed
a Power Purchase Agreement with GRIDCO (Respondent No.4)
being the nominated agency of the State of Odisha for the sale
of 25% of the gross power generated by GKEL to GRIDCO,
which came to 262.5 MW, upon the installed capacity reaching
1050 MW (350 MW x 3).
4.3 Thereafter, on 5th January 2007, GKEL addressed a letter to the
Government of Odisha requesting the State Government for a
recommendation to the Ministry of Coal, Government of India
for the allotment of long-term coal linkage in favour of GKEL.
Accordingly, the Department of Energy, Government of Odisha
vide letters dated 19th December 2005 and 12th January 2007
pursued the matter with the Government of India.
4.4 While this was underway, on 1st March 2007, the Haryana
Power Generation Corporation (Respondent No.6) issued a
Request for Proposal11 on behalf of the Haryana Utilities for
procurement of 2,000 MW power on a long-term basis. The
said RfP envisaged the procurement of power by way of a
tariff-based bidding process as provided for under Section 63
of the 2003 Act. In order to qualify for the bid, all the bidders
were required to submit proof of fuel arrangements in terms of
Clauses 2.1.5 and 2.1.5 A of the RfP which read thus: -
11
Hereinafter referred to as 'RfP'
670
[2025] 9 S.C.R.
Supreme Court Reports
"2.1.5 All Bidders are required to submit copies of
one or more of the following :-
(a) Linkage letter from the fuel supplier; or
(b) Fuel Supply Agreement between the Bidder and
Fuel Supplier; or
(c) Coal Block Allocation letter/In principle approval
for allocation of captive block from Ministry of Coal; or
(d) Other details submitted by Bidders subject to
acceptance by the Procurer as sufficient proof for
demonstration of ability,
The above proof of fuel arrangement is not required in
case the fuel to be used by the Bidder is imported fuel.
2.1.5 A The Successful Bidder is required to show a
firm fuel supply agreement/linkage by the time limit
specified for fulfilment of Conditions Subsequent as
mentioned in the PPA"
4.5 Subsequently, the Standing Linkage Committee (Long Term)12
of the Government of India in a meeting dated 2nd August 2007
approved a firm coal linkage of 2.14 MTPA13 for a 500 MW
power plant as had been originally envisaged under the 1,000
MW (500 MW x 2) configuration.
4.6 In addition to the said approval, the Ministry of Coal, Government
of India intimated its decision to allocate Rampia and Dip Side
Rampia coal blocks in Odisha to a consortium of six generating
companies including GEL. GEL's share was 4.6 MTPA which
corresponded to the project capacity of 1,000 MW. The
approval came to pass when the Ministry of Coal, Government
of India confirmed the allotment of the said coal blocks to the
aforementioned consortium vide letter dated 17th January 2008.
4.7 In the meanwhile, on 31st October 2007, GEL entered into an
agreement with PTC in order to enable the latter to participate
in the bidding process initiated by Haryana Power Generation
12
Hereinafter referred to as 'SLC-LT'
13
Short for 'million tonnes per annum'
[2025] 9 S.C.R.
671
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
Corporation (Respondent No. 6) by way of the RfP. In pursuit of
the same, PTC submitted its bid for sale of 300 MW of power
to the Haryana Utilities and the bid was accepted. Thereafter,
vide an order dated 31st July 2008, the Haryana Electricity
Regulatory Commission (HERC) adopted the tariff successful
bidders including PTC under Section 63 of the 2003 Act.
4.8 Subsequently, upon the allocation of the Rampia and Dip Side
Rampia coal blocks to GEL and the remaining allottees of the
consortium, Mahanadi Coalfields Limited14 issued a Letter of
Assurance15 dated 25th July 2008 in favour of GEL for providing
firm linkage of 2.14 MPTA coal, being the normative requirement
of one of the power plants having capacity of 500 MW.
4.9 Thereafter, on 7th August 2008, PTC executed two separate
Power Purchase Agreements16 with the Dakshin Haryana Bijli
Vitran Nigam Limited (Appellant No.2) and Uttar Haryana Bijli
Vitran Nigam Limited (Appellant No.3) for supply of 150 MW
of power to each, aggregating to 300 MW with the Haryana
STU-Inter Connection Point being the delivery point. Notably, the
fuel type proposed to be utilized was Coal India Limited (CIL)
coal linkage and it was proposed to be sourced from the MCL.
4.10 As the captive coal from Rampia and Dip Side Rampia had not
become available, on 12th November 2008, the SLC-LT approved
the tapering coal linkage of 2.384 MTPA for 550 MW of the
power project, against the coal block allocation to the concerned
project. In view of the same, on 8th July 2009, MCL issued a
LoA to GEL providing tapering linkage as aforementioned till
captive coal blocks became available.
4.11 Subsequently, as aforementioned, GKEL and GRIDCO executed
an amended and restated PPA on 4th January 2011 which altered
the configuration of the thermal power plants and their output
capacity, while keeping intact the entitlement of GRIDCO to
25% gross power generated by GKEL.
4.12 On 9th November 2011, GKEL entered into a PPA with Bihar
State Electricity Board, being the predecessor to Bihar Utilities
14
Hereinafter referred to as 'MCL'
15
Hereinafter referred to as 'LoA'
16
Hereinafter referred to as 'PPA'
672
[2025] 9 S.C.R.
Supreme Court Reports
for supply of 260 MW of net power/282 MW of gross power. Per
the said PPA, the fuel source proposed to be utilized was Coal
India Limited (CIL) coal linkage and the coal was proposed to
be sourced from MCL and the Rampia and Dip Side Rampia
coal blocks allocated to GKEL.
4.13 Thereafter, on 26th March 2013, MCL signed a Fuel Supply
Agreement17 with GKEL for supply of coal to the power plants
(3 x 350 MW) being 500 MW under normal linkage and 425
MW generation capacity covered under long term PPA i.e., an
aggregate of 1.819 MTPA/18.19 lakh tonnes. The FSA was
amended from time to time, initially to increase the quantum
of coal supplied from 1.819 MTPA to 2.0009 MTPA for the
same capacity of 425 MW and thereafter, the FSA was further
amended on 18th September 2014 to increase the quantum of
coal supplied to 2.14 MTPA on account of operationalization
of the PPA with Bihar Utilities.
4.14 Subsequently, on 28th August 2013, GKEL entered into another
independent FSA with MCL for tapering linkage.
4.15 In the meanwhile, on 23rd April 2013, GKEL preferred Petition
No. 79/MP/201318 before the CERC against Haryana Utilities,
being a petition under Section 79 of the 2003 Act read with the
statutory framework governing the procurement of power through
the competitive bidding process and Articles 12, 13 and 17 of
the PPA dated 7th August 2008 executed between PTC and the
Haryana Utilities and the back-to-back PPA dated 12th March
2009 executed between GEL and PTC for compensation due to
force majeure events and Change in Law during the operation
period. In the said petition, the GKEL sought adjustment of
tariff on account of events of Change in Law which affected the
power project during the operation period in order to restore
GKEL to the same economic position that it would have been
in if the concerned events had never occurred. It is notable that
GRIDCO was not made a party to this petition.
4.16 Soon thereafter, Unit I of the power project achieved commercial
operation and GKEL began supplying power to GRIDCO w.e.f.
17
Hereinafter referred to as 'FSA'
18
Hereinafter referred to as 'Petition No. 79'
[2025] 9 S.C.R.
673
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
30th April 2013. Within a few months, Unit II of the power project
achieved commercial operation and GKEL commenced the
supply of power to Haryana Utilities w.e.f. 7th February 2014.
Subsequently, Unit III of the power project achieved commercial
operation on 25th March 2014 and thereafter GKEL began
supplying power to Bihar Utilities w.e.f. 1st September 2014.
4.17 At this stage, it would be apposite to run through the quantum
of power that was contracted to be delivered under each of the
long-term PPAs, which are as follows:-
(a) Supply of 350 MW of gross power (Stage 1: 262.5 MW
and Stage 2: 87.5 MW) to GRIDCO in terms of PPA dated
28th September 2006 (as amended on 4th January 2011,
with delivery point as Odisha STU Interconnection point).
(b) Supply of 350 MW of gross power (300 MW net of
transmission losses and auxiliary consumption) to Haryana
Utilities based on PPA dated 7th August 2008 and backto-back PPA dated 12th March 2009 executed between
GEL and PTC.
(c)
Supply of 282 MW of gross power (260 MW net of auxiliary
consumption) to Bihar State Electricity Board in term of
PPA dated 9th November 2011, with delivery point as the
Bihar STU Interconnection point.
4.18 The CERC vide order dated 3rd February 2016 disposed of the
Petition No. 79 filed by GKEL in the following terms:-
(i)
At the time of bid submission, the notified rate of royalty
on coal was Rs. 55+5% of ROM price per tonne. This was
subsequently increased to an ad-valorem rate of 14% on
price of coal. The CERC held that GKEL would be entitled
to compensation for the same from Haryana Utilities.
(ii)
At the time of bid submission, there was no clean energy
cess on coal. However, this was subsequently introduced
by way of the Finance Act 2010 whereby statutory cess
of Rs. 100 per tonne had been levied on coal. This was
subsequently reduced to Rs. 50 per tonne. The CERC held
that GKEL would be entitled to recover clean energy cess
from Haryana Utilities in proportion to the coal consumed
for generation and supply of electricity to the appellants.
674
[2025] 9 S.C.R.
Supreme Court Reports
(iii) At the time of bid submission, there was no excise duty on
coal. Excise duty @ 6% on the determined sale price of
coal was introduced by the Finance Act 2012. The CERC
held that GKEL would be entitled to compensation through
adjustment in tariff on account of the freshly applicable
excise duty on coal.
(iv) Owing to shortfall in the linkage coal and also due to
transfer of certain quantum of tapering linkage from MCL
to Eastern Coalfields Limited, GKEL had to import coal and
also source open market coal. This had led to an additional
cost of Rs. 46.10 crores in the generation of power for
the Haryana Utilities during the months of February and
May to July 2014. The CERC held that GKEL would be
entitled to compensation for the same and accordingly set
out a mechanism for computing the actual additional cost
incurred in a month to mitigate the shortfall in linkage coal.
The actual compensation payable was to be calculated
and certified by the auditor in terms of the method laid
down by the CERC.
(v)
At the time of submission of the bid, the pricing of coal
was based on the UHV19 method which was Rs. 400
per tonne for F-grade, run-of-mine coal. Thereafter, the
Government of India directed a switchover from UHVbased pricing system to GCV20-based pricing system.
This led to a significant increase in price. The resultant
impact of the change was an increase in cost of Rs. 10.76
crores for a full year. The CERC disallowed this claim,
holding that any decision affecting the price of inputs for
generating electricity including coal could not be covered
under Change in Law.
(vi) GKEL had also raised claims for increase in rail freight
charges owing to busy season surcharge and development
surcharge. CERC disallowed this claim.
19
Short for 'Useful Heat Value'
20
Short for 'Gross Calorific Value'
[2025] 9 S.C.R.
675
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
(vii) GKEL also raised claims towards compensation/payment
for increase in MAT21 rate from 11.33% to 20.01% as
brought in by the Finance Act, 2012. This claim was also
disallowed.
(viii) A claim was raised by GKEL for payment towards the
increase in VAT22 from 4% to 5%. This claim was disallowed.
(ix) A claim was also raised for payment/compensation owing
to increase in water charges, which was disallowed.
4.19 It is notable that GKEL had preferred a similar petition being
Petition No. 112/MP/201523 against the Bihar Utilities with regard
to the PPA executed between the said parties for compensation
due to Change in Law which impacted revenues and costs
during the operating period. Vide order dated 7th April 2017,
the CERC disposed of the petition by allowing all such claims
which fell within the parameters of Change in Law events.
4.20 Subsequently, in terms of the order dated 3rd February 2016
passed in Petition No. 79, GKEL raised supplementary bills
towards compensation for 'Change in Law' events as approved
by the CERC, by pro-rating coal received from various sources
for the period commencing from February 2014 onwards. The
bills were accompanied by Form 15, detailed annexures and
calculations which clearly showed apportionment of firm linkage
coal corresponding to respective PPA capacities.
4.21 Disputing the supplementary bills raised by GKEL, Haryana
Utilities wrote to PTC on 22nd September 2016 seeking certain
clarifications as to whether the bills were as per the order of
the CERC dated 3rd February 2016. GKEL responded to the
letter on 6th October 2016 wherein it contended that as per
CERC's order, it was entitled to claim additional cost incurred
during a month in respect of imported coal, open market coal
and tapering coal or any other coal purchased to make up the
shortfall in the firm linkage coal supplied by MCL.
21
Short for 'Minimum alternate tax'
22
Short for 'Value added tax'
23
Hereinafter referred to as 'Petition No. 112'
676
[2025] 9 S.C.R.
Supreme Court Reports
4.22 Being dissatisfied with the response, Haryana Utilities refused to
make payments. To resolve the issue, a meeting was held on 25th
January 2017, however, the matter could not be resolved. In light
of the same, it was decided by PTC that the supplementary bills
raised by GKEL for the period between July 2016 to November
2016 would be considered to be disputed bills.
4.23 In order to resolve the issue, another meeting was convened
between the parties on 24th April 2017 wherein it was jointly
agreed that a clarificatory petition/review petition would be filed
before the CERC.
4.24 Thereafter, GKEL preferred Petition No. 105 before the CERC
under Section 79(1)(b) and (f) of the 2003 Act read with Articles
11.6 and 17 of the PPA dated 7th August 2008 for the recovery
of the outstanding amount from the Haryana Utilities raised
vide supplementary bills.
4.25 The CERC vide order dated 20th March 2018 disposed of
the said petition by directing the Haryana Utilities to pay the
supplementary bills raised by GKEL for the period from July
2016 to March 2017 along with late payment surcharge as
per the provisions of the PPA executed between the parties
within one month. The CERC held, in terms of the previous
order dated 3rd February 2017 as well as the decision of this
Court in Energy Watchdog v. Central Electricity Regulatory
Commission and Others24, GKEL would be eligible for relief for
any shortfall in the firm linkage and tapering linkage met through
import and open market coal. To avoid putting GRIDCO and
Bihar Utilities at a disadvantage, the CERC further directed that
the firm and tapering linkage coal supplied to GKEL would have
to be apportioned on a pro rata basis to all the beneficiaries of
the project and the cost of procurement of coal from alternate
sources to meet the shortfall would also be apportioned pro
rata based on power supplied to beneficiaries.
4.26 Aggrieved thereby, Haryana Utilities preferred Appeal No. 135
of 2018 before the learned APTEL. Subsequently, GRIDCO
preferred Appeal No. 54 of 2019 before the learned APTEL.
24
(2017) 14 SCC 80
[2025] 9 S.C.R.
677
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
4.27 The learned APTEL vide the common judgment and final order
dated 20th December 2019 dismissed both the appeals and
upheld the order of the CERC.
4.28 Hence, these civil appeals under Section 125 of the 2003 Act.
SUBMISSIONS
5.
We have heard Shri M.G. Ramachandran, learned Senior Counsel
appearing for the appellants, Dr. Abhishek Manu Singhvi, learned
Senior Counsel and Shri Vishrov Mukherjee, learned counsel
appearing for Respondent No.1, Ms. Prerna Singh, learned counsel
appearing for Respondent No.2, Shri Raj Kumar Mehta, learned
counsel appearing for Respondent No. 4 and Shri S.B. Upadhyay,
learned Senior Counsel appearing for Respondent No.5.
6.
Shri Ramchandran, learned Senior Counsel appearing on behalf of
the Haryana Utilities submitted that from the perusal of the RfP issued
by Haryana Utilities in March, 2007 and the bid submitted by GKEL
on 23rd November 2007 through PTC, it is clear that the bidders
were required to submit the details with regard to fuel arrangement,
source of fuel among other particulars. It is equally clear that while
submitting the bid, GKEL had shown the source of fuel to be firm
linkage granted by way of SLC-LT meeting held on 2nd August 2007.
It is further submitted that the perusal of PPA dated 7th August 2008
between Haryana Utilities and PTC would also show that the PPA
was based on firm linkage coal from MCL. It is submitted that as
against this, the PPA dated 9th November 2011, entered into by
GKEL with Bihar Utilities clearly indicated the sources of fuel as
firm linkage as well as Rampia and Dip Side of Rampia coal block
allotment (tapering linkage).
7.
Shri Ramchandran further submitted that FSA as well as the LoA in
favour of GKEL for the first phase was unit specific. It is submitted
that FSA becomes operational in proportion to the generation covered
under long term PPAs. It is submitted that at the time when the FSA
dated 26th March 2013 was signed, even though the linkage was
for 500 MW, only 425 MW was considered as generation capacity.
This was so since the PPAs with Haryana Utilities for 300 MW as
well as with GRIDCO for 125 MW were the only long term PPAs at
that time. Shri Ramchandran further submitted that subsequently,
when the Bihar PPA became operational, the capacity under the
678
[2025] 9 S.C.R.
Supreme Court Reports
FSA vis-à-vis firm linkage was modified by specific additional 29.55
MW (out of a total Bihar PPA capacity of 260 MW).
8.
Shri Ramchandran contended that the Haryana Utilities would be
entitled to supply of 300 MW of energy from the firm linkage whereas
GRIDCO would be entitled to supply of 125 MW energy produced
using the coal available from the firm linkage. It is, therefore, submitted
that the Haryana Utilities cannot be burdened with the additional cost
incurred on account of production of coal from the MCL tapering
linkage. Shri Ramchandran submitted that the difference on account
of the use of fuel from tapering linkage will have to be borne only
by the GRIDCO and Bihar Utilities inasmuch as the said coal was
used for production of power for Unit II of 200 MW and Unit III of 350
MW. It is, therefore, submitted that both the CERC as well as the
learned APTEL erred in putting the burden on the Haryana Utilities
whereas the same should have been apportioned to Bihar Utilities
and GRIDCO.
9.
Shri Raj Kumar Mehta, learned counsel appearing on behalf of
GRIDCO submitted that it was the PPA with GRIDCO which came to
be operationalized first in April 2013. It is submitted that even though
GRIDCO's share in the installed capacity of the thermal station of
GKEL was 25%, the order dated 3rd February 2016 in Petition No. 79
and order dated 20th March, 2018 in Petition No. 105 were passed
without impleading GRIDCO. It is submitted that GRIDCO was a
necessary and proper party as its rights were adversely affected.
It is submitted that GRIDCO was also not impleaded in the appeal
being Appeal No. 135 of 2018 filed by the Haryana Utilities before
the learned APTEL. It is submitted that on account of the order dated
28th November 2018 of the learned APTEL, GRIDCO came to be
impleaded in the said appeal.
10. Shri Mehta further submitted that the reasoning given by the learned
APTEL that since GRIDCO's PPA was Cost Plus Tariff PPA under
Section 62 of the 2003 Act whereas the proceedings before the CERC
and the learned APTEL were initiated seeking compensation on the
grounds of Change in Law with regard to Haryana Utilities and Bihar
Utilities which fell under Section 63 of the 2003 Act and therefore,
GRIDCO was not necessary party, is wholly unsustainable. It is
submitted that GKEL had specifically prayed for pro rating of linkage
coal amongst all the three utilities namely GRIDCO, Haryana Utilities
and Bihar Utilities and as such GRIDCO was a necessary party.
[2025] 9 S.C.R.
679
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
11. It is submitted that the project sought to be installed by GKEL was
at the instance of the Government of Odisha. It is submitted that the
State of Odisha had provided all the necessary facilities to GKEL
to install the project. It is therefore submitted that it is the GRIDCO
which had the first right to the power generated from the coal made
available from the firm linkage.
12. Dr. Abhishek Manu Singhvi appearing on behalf of the respondent
No. 1 submitted that the appeals are liable to be dismissed on
the short ground that they do not raise any substantial question of
law as is required under Section 125 of the 2003 Act. It is further
submitted that the order dated 20th March 2018 in Petition No. 105
is passed by the CERC on the basis of its earlier order dated 3rd
February, 2016 in Petition No. 79. It is submitted that the CERC in
Petition No. 79 had clearly held that coal supplied to GKEL under
linkage by Government of India is to be apportioned on pro rata
basis to all the three Distribution Companies25 i.e. Haryana Utilities,
GRIDCO and Bihar Utilities. It is submitted that since the Haryana
Utilities had not challenged the said order, it was not permissible for
them to challenge the order passed in Petition No. 105. It is further
submitted that supply of coal from all the modes of procurement
has to be considered for the power project inasmuch as allocation
by Government of India was for the whole project and not specific
to any particular DISCOM.
13. Dr. Singhvi further submitted that the concurrent orders passed by
the CERC and the learned APTEL are equitable orders inasmuch
as it has been held that coal supplied under the linkage is to be
apportioned on pro rata basis to all the DISCOMS. However, if the
contentions of the Haryana Utilities are accepted, it will amount to
burdening the consumers in the State of Odisha and Bihar. It is
further submitted that if the contentions of both Haryana Utilities and
GRIDCO are accepted, it will amount to putting the total burden on
the consumers in the State of Bihar.
14. Dr. Singhvi further contended that the attitude of Haryana Utilities
is of approbation and reprobation. It is submitted that in the case
of Uttar Haryana Bijli Vitran Nigam Ltd. & Another v. Adani
25
Hereinafter referred to as 'DISCOMS'
680
[2025] 9 S.C.R.
Supreme Court Reports
Power (Mundra) Limited and Others26, this Court noted that after
accepting before the CERC that they would adopt the methodology
as given in the case of GMR-Kamalanga Energy Limited v. Dakshin
Haryana Bijli Vitran Nigam Ltd.27, Haryana Utilities changed their
stand subsequently.
15. In the totality, Dr. Singhvi submitted that the appeals deserve to be
dismissed.
16. Shri S.B. Upadhyay, learned Senior Counsel appearing on behalf of
respondent No. 5 has supported the concurrent orders of the CERC
and the learned APTEL.
DISCUSSION AND ANALYSIS
17. At the outset, it can be noticed that all three DISCOMS agree that
GKEL is entitled to compensation on account of Change in Law
event. However, the Haryana Utilities and GRIDCO argued that the
said liability should not come to them but should instead be passed
on to the other two. It is only the Bihar Utilities which agrees that the
liability has to be equally shared by all three DISCOMS in proportion
to the energy supplied to them. We find it appropriate to deal with
both the appeals separately.
CIVIL APPEAL NO. 1929 OF 2020
18. Undisputedly, the present appeal filed by Haryana Utilities challenges
the impugned judgment and final order passed by learned APTEL
whereby the learned APTEL has upheld the order of the CERC. The
appeal to this Court has been filed under Section 125 of the 2003
Act. The perusal of Section 125 shows that the appeal is tenable
only on the grounds as available under Section 100 of the Code of
Civil Procedure, 190828, as such, it could be seen that appeal would
be tenable only on a substantial question of law.
19. One of us (B.R. Gavai, J, as he then was) had an occasion to deal
with a large batch of electricity appeals pertaining to Change in Law
event. This Court first decided the common issues involved in the
26
(2023) 14 SCC 736
27
(2016) SCC OnLine CERC 43
28
Hereinafter referred to as "CPC"
[2025] 9 S.C.R.
681
Haryana Power Purchase Centre (HPPC) and Others v.
GMR Kamalanga Energy Limited and Others
said batch of appeals in Maharashtra State Electricity Distribution
Company Limited v. Adani Power Maharashtra Limited and
Others29. It would be apposite to refer to following paragraphs of
the said judgment:
"118. It could thus be seen that two expert bodies i.e.
CERC and the learned APTEL have concurrently held, after
examining the material on record, that the factors of SHR
and GCV should be considered as per the Regulations or
actuals, whichever is lower. CERC as well as the State
Regulatory bodies, after extensive consultation with the
stakeholders, had specified SHR norms in the respective
Tariff Regulations. In addition, insofar as GCV is concerned,
the CEA has opined that the margin of 85-100 kcal/kg
for a non-pit head station may be considered as a loss
of GCV measured at wagon top till the point of firing of
coal in boiler.
119. In this respect, we may refer to the following
observations of this Court in Reliance Infrastructure
Ltd. v. State of Maharashtra [Reliance Infrastructure
Ltd. v. State of Maharashtra, (2019) 3 SCC 352] : (SCC
pp. 376-77, paras 38-39)
"38. MERC is an expert body which is entrusted
with the duty and function to frame regulations,
including the terms and conditions for the
determination of tariff. The Court, while exercising
its power of judicial review, can step in where
a case of manifest unreasonableness or
arbitrariness is made out.