JAIPUR VIDYUT VITARAN NIGAM LTD. & ORS. versus ADANI POWER RAJASTHAN LIMITED & ANR.

Citation: [2020] 12 S.C.R. 301 · Decided: 31-08-2020 · Supreme Court of India · Bench: ARUN MISHRA, VINEET SARAN, M.R. SHAH · Disposal: Case Partly allowed

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Judgment (excerpt)

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   [2020] 12 S.C.R. 301
301
JAIPUR VIDYUT VITARAN NIGAM LTD. & ORS.
v.
ADANI POWER RAJASTHAN LIMITED & ANR.
(Civil Appeal Nos. 8625-8626 of 2019)
AUGUST 31, 2020
[ARUN MISHRA, VINEET SARAN AND M. R. SHAH, JJ.]
Electricity Act, 2003 – s.63 – ‘Change in law’ compensation
– Appellant is electricity Distribution Licensee in the State of
Rajasthan – It entered into a Power Purchase Agreement (PPA) on
28.1.2010 with Adani Power Rajasthan Limited (APRL), a
generating company in pursuance to a tariff-based competitive bid
process in terms of s.63 of the Act – The terms of PPA contained a
tariff, which could be varied only as per the specific provisions
contained in the PPA, and not otherwise – The PPA postulated
domestic coal usage as the primary fuel – Meanwhile, the New Coal
Distribution Policy, 2013 (NCDP of 2013), was notified on
26.7.2013 by the Central Government – Claim of APRL for increased
tariff under the change in law provisions in the PPA – Tenability of
– Held: The parties had agreed ad idem that bid was evaluated based
on domestic coal, and escalations were also based on domestic coal
– It was binding on both the parties – The Policy having been
thereafter revised in terms of NCDP of 2013, thus assurance given
by the Government of India under the NCDP of 2007 was taken
away – The PPA was based on the domestic law and there was a
change in domestic law – Submission that the bid and the PPA were
based on imported coal, cannot be accepted – When there was a
change in policy with respect to obtaining coal itself, which was
agreed to in the PPA, the change in law would be applicable –
Requirement to compensate due to change in law – The same is
based on the principle of restitution – APRL accordingly entitled to
claim compensation under the change in law as provided in Article
10 of the PPA – Doctrines/ Principles – Principle of restitution.
Electricity Act – s.125 – Appeal under – Scope – Held: Scope
of appeal u/s.125 of the Electricity Act is akin to s.100 CPC –
Concurrent findings based upon the facts cannot be disturbed in
appeal – Appeal.
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SUPREME COURT REPORTS
[2020] 12 S.C.R.
Partly allowing the appeals, the Court
HELD:1.1. Considering the documents on record, it is
apparent that APRL’s bid was premised only on domestic coal.
It was evaluated as such, and the Power Purchase Agreement (PPA)
also records the same. The parties agreed ad idem that bid was
evaluated based on domestic coal, and escalations were also based
on domestic coal. Accordingly, the PPA was entered into, and
primary fuel in the PPA was mentioned to be domestic coal from
captive coal block/coal linkage and imported coal as a fallback
support arrangement.  It was binding on both the parties. Under
Article 1.1 of the PPA, the primary fuel was mentioned as domestic
coal, as such the submission that the bid and the PPA were based
on imported coal, cannot be accepted. [Paras 39, 40][329-C-D,
F-G; 330-A-B]
1.2. The PPA is final and binding on parties, and approval
of tariff by the Rajasthan Electricity Regulatory Commission
(RERC) was based on domestic coal. Rajasthan Discoms
(including the appellant) agreed to use domestic coal on account
of likely advantage of lower escalation in tariff on a bid based on
domestic coal than that of imported coal.  The decision of the Bid
Evaluation Committee was found to be in their best interest.
Thus, APRL bid was not based on imported coal, that would not
have been in favour of Rajasthan Discoms and would have
resulted in more escalations in the tariff.  Thus, APRL could not
be denied the benefit of the very foundational basis on which the
RERC approved its bid.  APRL could not be made to suffer from
both the ends.  Various documents and the PPA make it clear
that its bid was premised on domestic coal and approved tariff
was based on domestic coal, the order of RERC is final,
conclusive, and binding on the parties; it has not been questioned
and attained finality.  No stand contrary to the same was
permissible to be taken by the Rajasthan Discoms. [Para 41][330-
B-E]
1.3. It is further apparent from reply dated 31.7.2013 filed
by the Rajasthan Discoms before the RERC in which it was clearly
admitted that non-availability of domestic coal from the Central
Government would put the case of APRL within the scope of
change in law.  Rajasthan Discoms before the RERC admitted
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that the bid was based on domestic coal, non-availability of which
entitles APRL to c

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