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Legal Case Shots

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Legal Case Shots is a searchable database of Supreme Court of India judgments, each broken down into the case type, the court's key holding, and a practical lesson learnt, with the full judgment available as a PDF for citation or deeper reading.

Electricity & Energy LawSupreme Court of India

Uttar Haryana Bijli Vitran Nigam Ltd. & Anr. vs. Adani Power (Mundra) Limited & Ors.

Civil Appeal · 2023 INSC 401Decided 20 Apr 2023
Civil Appeal No. 4143 of 2020
B.R. Gavai · Vikram Nath · Sanjay Karol

Background

Haryana's power distribution utilities had signed Power Purchase Agreements in 2008 with Adani Power (Mundra) Limited (AP(M)L) to buy 1424 MW of electricity from its Mundra plant, at a price fixed through competitive bidding. When India's National Coal Distribution Policy changed in 2013, the domestic coal actually allotted to AP(M)L fell short of what had originally been assured, raising its cost of generating power. Following an earlier Supreme Court ruling (Energy Watchdog) that such a change in Indian coal-supply policy, though not a similar change in Indonesian coal-export rules, could qualify as a "Change in Law" entitling the generator to compensation, the electricity regulator (CERC) and the Appellate Tribunal for Electricity (APTEL) both ruled in Adani Power's favour on the amount of relief, prompting Haryana's utilities to appeal to the Supreme Court.

Decision Breakdown

The Court, following its recent related ruling in Maharashtra State Electricity Distribution Co. v. Adani Power Maharashtra, held that most of the common issues (whether relief should be based on actual coal shortfall rather than a fixed formula, how technical parameters should be measured, and the start date for compensation) were already settled in Adani Power's favour. On the two issues specific to this case, the Court rejected Haryana's argument that Adani Power's bid was based on a fixed 70:30 domestic-to-imported coal split and that compensation should be reduced accordingly: the bid documents showed no such firm commitment, and Haryana Utilities had itself earlier admitted, both in filings and during the APTEL hearing, that the entire domestic coal received was used to supply their contracted capacity. The Court also held Haryana Utilities could not now object to the compensation calculation method after having earlier accepted before the regulator that the same method used in an unrelated prior case (GMR Kamalanga) would apply: this amounted to impermissible "approbation and reprobation" (blowing hot and cold). Reiterating that courts should be slow to second-guess expert regulatory bodies like CERC and APTEL unless their decisions are arbitrary, illegal, or ignore mandatory law, the Supreme Court dismissed the appeal and upheld the concurrent findings in Adani Power's favour.

Lesson Learnt

A party that accepts a particular calculation methodology or legal position before a regulator cannot turn around and challenge that very approach once the outcome goes against it; and courts generally defer to specialized regulatory tribunals' factual findings unless those findings are shown to be arbitrary or contrary to law.

Uttar Haryana Bijli Vitran Nigam Ltd. & Anr. vs. Adani Power (Mundra) Limited & Ors. – Legal Case Shots | LegalAware