Haryana Utilities Indulged In Approbation & Reprobation, SC Upholds 'Change In Law' Compensation Granted To Adani Power

The Supreme Court in an appeal has observed that Haryana Utilities are indulging in approbation and reprobation and that they cannot be permitted to blow hot and cold at the same time.

The two-Judge Bench comprising Justice B.R. Gavai and Justice Vikram Nath said, “We find that Haryana Utilities are indulging into approbation and reprobation. They cannot be permitted to blow hot and cold at the same time. After accepting before the CERC that they would adopt the methodology as given in the case of GMR Kamalanga Energy Limited (supra), it would not be appropriate, in our view, on the part of the appellants, which are, after all, instrumentalities of the State, to change its stand after final orders are passed by the CERC.”

The Bench asserted that no error could be found with the concurrent findings that AP(M)L i.e., Adani Power (Mundra) Limited was entitled to Change in Law relief for 100% of the contracted capacity which is 70% of the installed capacity of the Phase IV extension of Mundra Project.

Senior Advocate M.G. Ramachandran appeared for the appellants while Senior Advocate A.M. Singhvi appeared for the respondent.

Brief Facts -

The appellants had challenged the judgment and order passed by the Appellate Tribunal for Electricity, New Delhi (APTEL) thereby dismissing the appeal filed by them and maintaining the judgment and order passed by the Central Electricity Regulatory Commission (CERC).

Uttar Haryana Bijli Vitran Nigam Ltd. and Dakshin Haryana Bijli Vitran Nigam Ltd. being distribution licensees were undertaking the distribution and retail supply of electricity to consumers in the State of Haryana. Haryana Utilities had entered into two Power Purchase Agreements (PPAs) with A(M)PL for procurement of a contracted capacity of 1424 MW from generating units established by AP(M)L at Mundra in the State of Gujarat.

The Supreme Court in view of the facts and circumstances of the case noted, “Even according to Haryana Utilities, the entire coal covered under FSA was required to be utilized for generating power to be supplied to it as per the Memorandum of Understanding (“MoU” for short). Therefore, denial of the benefit of shortfall of the coal assured under FSA, in our view, would be contrary to the restitutionary principle …”

The Court further noted that in any case, APTEL clarified that AP(M)L was neither claiming nor was entitled to claim any Change in Law compensation beyond the one which was covered by linkage coal, i.e. 1386 MW.

“… no error could be found with the concurrent findings that AP(M)L was entitled to Change in Law relief for 100% of the contracted capacity i.e. 1386 MW, which is 70% of the installed capacity of 1980 MW of the Phase IV extension of Mundra Project. In other words, the finding of the CERC and the learned APTEL is to the effect that AP(M)L would not be entitled to any benefit of Change in Law beyond 70% of the installed capacity i.e. 1386 MW. The said findings cannot be said to not be based on the material on record, or based on extraneous considerations”, said the Court.

The Court observed that the concurrent findings of fact recorded by the expert bodies could have been interfered with only if they failed to take into consideration the mandatory statutory provisions or if the decisions had been taken by them on extraneous considerations or if they were ex facie arbitrary and illegal and nothing of that sort is found in the judgment to warrant interference.

Accordingly, the Court dismissed the appeal.

Cause Title- Uttar Haryana Bijli Vitran Nigam Ltd. & Anr. v. Adani Power (Mundra) Limited & Ors.

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