GMR WARORA ENERGY LIMITED versus CENTRAL ELECTRICITY REGULATORY COMMISSION (CERC) & ORS.

Citation: [2023] 8 S.C.R. 183 · Decided: 20-04-2023 · Supreme Court of India · Bench: BHUSHAN RAMKRISHNA GAVAI · Disposal: Dismissed

Cited by 5 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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   [2023] 8 S.C.R. 183
183
GMR WARORA ENERGY LIMITED
v.
CENTRAL ELECTRICITY REGULATORY COMMISSION
(CERC) & ORS.
(Civil Appeal No.11095 of 2018)
APRIL 20, 2023
[B. R. GAVAI AND VIKRAM NATH, JJ.]
Electricity – Components to be considered as “Change in
Law” events – Held: The term “Law” has been defined in the Power
Purchase Agreements – ‘Law’ would mean all laws including
Electricity Laws in force in India and any statute, ordinance,
regulations, orders, Notification or code, rules, or any interpretation
of any of them by an Indian Governmental Instrumentality and
having force of law – It shall also include all rules, regulations,
decisions and orders of the CERC and the MERC – Thus, 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 – Revision of charges to
be paid on Busy Season Surcharge, Development Surcharge and
Port Congestion Charges from time to time by the ‘Railway Board’
would come within the ambit of ‘Change in Law’ – Notifications by
which MoEF mandated power projects to use beneficiated coal with
ash content lower than 34% would also amount to “Change in Law’
– Further, change in NCDP would also amount to ‘Change in Law’
– With regard to forest tax, as on the cut-off date there was no
Forest Tax applicable on coal mined and transported from South
Eastern Coalfields Limited mines located in Forest area – For the
first time, vide Notification of the Forest Department, Government
of Chhattisgarh a fee was levied – Said notification issued by the
Forest Department of the Government of Chhattisgarh, which is an
instrumentality of the State would also be a ‘Change in Law’ – No
error in the finding of the APTEL in that regard – Also, ‘add on
premium’ was required to be paid on account of cancellation of
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SUPREME COURT REPORTS
[2023] 8 S.C.R.
captive coal blocks and inordinate delay on account of Go-No-Go
policy – As such, it cannot be said that the reasoning adopted by
the APTEL is perverse and arbitrary – EFC imposed by CIL which
is an instrumentality of the State, circular of CIL would also amount
to ‘Change in Law’ – In the light of said findings, each of the appeals
considered independently, dismissed – Electricity Act, 2003.
Electricity – Carrying cost – Grant of interest – Held: 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 – 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 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 – In view of the consistent position of law and
application of restitutionary principles and privity of contractual
obligations between the parties as contained in the Power Purchase
Agreements, the view taken by the APTEL with regard to carrying
cost warrants no interference – Electricity Act, 2003.
Electricity Act, 2003 – s.125 – Appeals arising from concurrent
findings of fact arrived at by two statutory bodies having expertise
in the field – Held: CERC, SERCs and APTEL are bodies consisting
of experts in the field – This Court should be slow in interfering
with the concurrent findings of fact unless they are found to be
perverse, arbitrary and either in ignorance of or contrary to the
statutory provisions – Appeal to this Court u/s.125 is only permissible
on any of the grounds as specified in s.100 of the Code of Civil
Procedure, 1908 – As such, the appeal to this Court would be
permissible only on substantial questions of law – However, even in
cases where well-reasoned concurrent orders are passed by the ERC
and APTEL, the same are challenged by the DISCOMS as well as
the Generators – On account of pendency of litigation, which in
some of the cases in this batch has been more than 5 years, non-
payment of dues would entail paying of heavy carrying cost to the
Generators by the DISCOMS, which, in turn, will be passed over to
the end consumer – As a result, it will be the end consume

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