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Nabha Power Limited & Anr. vs Punjab State Power Corporation Ltd. & Anr.

Not available · 2024 INSC 833Decided 5 Nov 2024
Not available

Background

Nabha Power Limited was selected in 2009 to build a power plant supplying Punjab State Power Corporation Limited, under a competitive bidding process. Under the Mega Power Policy, qualifying projects get a customs duty exemption on imported equipment. The Government of India announced a policy relaxation via a press release on 1 October 2009 (removing the earlier requirement that a thermal plant be "inter-State" to qualify), but the formal notifications implementing it were only issued in December 2009, and Nabha Power's own project was certified with Mega Power status only on 30 July 2010. A dispute arose over the tariff/cost-pass-through implications of exactly when the exemption became available to this project, and the State Electricity Regulatory Commission and the Appellate Tribunal for Electricity both ruled that the benefit could apply only from 30 July 2010, not from the earlier press release date.

Decision Breakdown

The Supreme Court held that a government press release announcing a policy change is not, by itself, a binding "order" or "law" that changes legal entitlements from its date: legal effect flows only from the actual notifications and certifications that formally implement a policy. Since the customs notification changes took effect only from 11 and 14 December 2009, and Nabha Power's specific project was certified as a Mega Power Project only on 30 July 2010, the company could not claim the tariff benefit of the exemption from the earlier press release date. The Court distinguished this from other precedents where a government had spoken with a single consistent voice extending a benefit from an earlier date, noting here there was no such continuous commitment specific to this project. The appeal was dismissed, upholding the concurrent findings of the regulatory bodies below.

Lesson Learnt

An announcement of a policy change, even from the government, does not by itself create binding legal rights or amend a statutory notification; entitlements under a scheme take effect only from the date of the actual notification or certification implementing it, not from the date intent was announced.

Official source (sci.gov.in)View Judgment (PDF)

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