UTTAR HARYANA BIJLI VITRAN NIGAM LTD [UHBVNL]. & ANR versus ADANI POWER LTD. & ORS.

Citation: [2019] 4 S.C.R. 487 · Decided: 25-02-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed

Cited by 8 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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UTTAR HARYANA BIJLI VITRAN NIGAM LTD.
[UHBVNL] & ANR.
v.
ADANI POWER LTD. & ORS.
(Civil Appeal No. 5865 of 2018)
FEBRUARY 25, 2019
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Electricity – Power Purchase Agreements(PPAs) – Adjustment
in monthly tariff payment on account of change in law – Appellants
in C.A. No.5865 of 2018 are distribution licensees in the State of
Haryana –  Appellant in C.A. No. 6190 of 2018 is the Gujarat Urja
Vikas Nigam Ltd. (GUVNL), assigned with the task of procuring
power by the State of Gujarat – Respondent, a generating company
has a 4620 MW coal-fired power plant at Mundra, District Kutch,
Gujarat – On 23.06.2005 SEZ Act was enacted – U/s.26, SEZ Act
every Developer shall be entitled to various exemptions, such as
duty leviable u/Customs Act, Customs Tariff Act etc.– Respondent
approved as Co-Developer (which is included within the term
“Developer”) – Appellant established a power plant in the aforesaid
SEZ – Respondent entered into various PPAs inter alia dtd 07.08.2008
and 02.02.2007, with the appellant – Ministry of Commerce &
Industry (MoC&I) vide notification dtd. 06.04.2015 withdrew the
exemption of all duties under the Customs Act, Customs Tariff Act
etc. on goods imported/procured by the respondent – Vide
notification dtd.16.02.2016 exemption from service tax, to which
the respondent was entitled, also withdrawn – Respondent filed
petition before the Central Electricity Regulatory Commission
(CERC) seeking compensation for change in law by invoking Art.13
of the respective PPAs – Allowed, however held that respondent’s
prayer to grant carrying cost on restitutionary principles from the
date of change in law till the date of decision cannot be allowed –
Judgment set aside by Appellate Tribunal – On appeal, held:
Art.13.4.1 makes it clear that adjustment in monthly tariff payment
on account of change in law shall be effected from the date of the
change in law [sub-clause (i) of clause 4.1], in case the change in
law happens to be by way of adoption, promulgation, amendment,
[2019] 4  S.C.R. 487
                                                  487
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SUPREME COURT REPORTS
[2019]  4  S.C.R.
re-enactment or repeal of the law or change in law– Art.13.4.1 is
subject to Art.13.2 of the PPAs –Art.13.2 is an in-built restitutionary
principle which compensates the party affected by such change in
law – Art.13.2, however, goes on to divide such restitution into two
separate periods – Restitutionary principles apply in case a certain
threshold limit is crossed in both sub-clauses (a) and (b) –
Indisputably, the present case is covered by sub-clause (b) and the
aforesaid threshold has been crossed – Mechanism for claiming a
change in law is then set out by Art.13.3 of the PPA – Sub-clause
(c) does not occur in the PPA in C.A. No.5865 of 2018 – Present
case is governed by sub-clause (i) of Art.13.4.1, it is obvious that
sub-clauses (b) and (c) have no application to the facts of the present
case –A reading of Art.13 as a whole, therefore, leads to the position
that subject to restitutionary principles contained in Art.13.2, the
adjustment in monthly tariff payment, in the facts of the present
case, has to be from the date of the withdrawal of exemption which
was done by administrative orders dtd. 06.04.2015 and 16.02.2016
– Present case, therefore, falls within Art.13.4.1(i) – Respondents
entitled to adjustment in their monthly tariff payment from the date
on which the exemption notifications became effective – No reason
to interfere with the judgment of the Appellate Tribunal – Electricity
Act, 2003 – s.2(18) – Special Economic Zones Act, 2005 – s.26 –
Customs Act, 1962 – Customs Tariff Act, 1975 – Central Excise Act,
1944.
Dismissing the appeals, the Court
HELD: 1.1 Article 13.4.1 makes it clear that adjustment in
monthly tariff payment on account of change in law shall be effected
from the date of the change in law [sub-clause (i) of clause 4.1], in
case the change in law happens to be by way of adoption,
promulgation, amendment, re-enactment or repeal of the law or
change in law.  As opposed to this, if the change in law is on
account of a change in interpretation of law by a judgment of a
Court or Tribunal or governmental instrumentality, the case would
fall under sub-clause (ii) of clause 4.1, in which case, the monthly
tariff payment shall be effected from the date of the said order/
judgment of the competent authority/Tribunal or the governmental
instrumenta

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