# Jaipur Vidyut Vitran Nigam Ltd. & Ors v. Adani Power Rajasthan Ltd. & Anr

- **Citation:** 2025 INSC 770
- **Court:** Supreme Court of India
- **Decided:** 2025-05-23
- **Case number:** Civil Appeal No. 4336 of 2025
- **Bench:** M.M. Sundresh, Rajesh Bindal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jaipur-vidyut-vitran-nigam-ltd-ors-v-adani-power-rajasthan-ltd-anr-38733
- **Pages:** 29

## Headnote

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]

## Text

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[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.
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[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.
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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
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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.
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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)
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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.
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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.
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(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.
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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
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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.
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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
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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, reenactment 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 endconsumer, 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.