Holding

The SHAKTI Policy constitutes a change in law under Clause 13.1.1 of the PPAs, and the APTEL’s order allowing APML’s relief is affirmed.

Summary

Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) and ADANI Power Maharashtra Ltd. (APML) entered into four long‑term power purchase agreements. APML claimed compensation for a "change in law" after the Ministry of Coal introduced the New Coal Distribution Policy 2013 and later the SHAKTI Policy, which altered the assured domestic coal supply. The Maharashtra Electricity Regulatory Commission (MERC) allowed relief, but the Appellate Tribunal for Electricity (APTEL) dismissed MSEDCL’s cross‑appeal and upheld APML’s claim. MSEDCL appealed to the Supreme Court, raising five issues including whether the SHAKTI Policy constitutes a change in law, the adequacy of notice, the method of computing compensation, the requirement of advance intimation, and the entitlement to carrying cost. The Court held that the SHAKTI Policy does amount to a change in law under Clause 13.1.1 of the PPAs, that the APTEL’s findings were not perverse or extraneous, and that the restitutionary principle applies. Consequently, the Supreme Court dismissed the appeals.

Issues considered

Whether the introduction of the SHAKTI Policy amounts to a change in law under the PPAs and whether APML gave the required notice of such change
Whether MERC was correct in limiting the domestic coal shortfall to a maximum of 25% of the assured coal quantity after the SHAKTI Policy
Whether the method of computing change‑in‑law compensation should be based on the lower of the bid‑submitted SHR/Auxiliary consumption or actual values, and the appropriate GCV of coal
Whether MERC was justified in directing APML to provide advance intimation of the impact on energy charge when using alternate coal for merit order dispatch
Whether MSEDCL is justified in contesting APML’s entitlement to carrying cost

Legislation cited

Electricity Act, 2003

Subjects

electricitychange in lawpower purchase agreementSHAKTI Policycompensationtariffcarrying costrestitutionMERCAPTEL

Judgment

668 [2023]
SUPREME COURT 5 S.C.R. 668
REPORTS [2023] 5 S.C.R.

A MAHARASHTRA STATE ELECTRICITY DISTRIBUTION
COMPANY LIMITED
v.
ADANI POWER MAHARASHTRA LIMITED AND ANOTHER
B (Civil Appeal Nos. 677-678 of 2021)
APRIL 20, 2023
[B. R. GAVAI AND VIKRAM NATH, JJ.]
Electricity– Change in Law– SHAKTI Policy, if amounts to
Change in Law –ADANI Power Maharashtra Limited (APML) and
C
Maharashtra State Electricity Distribution Company Limited
(MSEDCL) entered into four long term Power Project
Agreements(PPAs)–APML filed petition seeking compensation in
Tariff on account of Change in Law under the PPAs before
Maharashtra Electricity Regulatory Commission (MERC) –Allowed–
D Subsequently, APML filed a fresh petitionbefore MERC seeking
reliefin support of Change of Law under the respective PPAs fornon-
availability/short supply of domestic coal under SHAKTI Policy after
March, 2017, which was allowed– Cross-appeals filed before APTEL
– Appeal filed by MSEDCL was dismissed while that of APML was
allowed –Held: If there is a Change in any consent, approval or
E
licence available/obtained for the project, otherwise than for the
default of theseller, which results in any change in any cost of the
business of selling electricity, then the said seller will begoverned
under Clause 13.1.1 of the PPA – Modification to NCDP 2007by
the communication dtd. 31st July 2013amounts to Change in Law
F and the generating companies are entitled to compensation on
account of such Change in Law –SHAKTI Policy also reduces the
ACQ as assured under the 2007 NCDP and thus,will also have to
be held to be Change in Law –Further, the restitutionary principle
will also be applicable on account of change occurring due to the
introduction of SHAKTI Policy –View taken by APTEL is neither in
G
ignorance of the mandatory statutory provisions nor based on
extraneous consideration or ex-facie arbitrary/illegal – Thus, no
interference warranted.
Energy Watchdog v. Central Electricity Regulatory
Commission and Others (2017) 14 SCC 80;
H
668
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 669
ADANI POWER MAHARASHTRA LTD.

Maharashtra State Electricity Distribution Company A
Limited (MSEDCL) v. ADANI Power Maharashtra
Limited (APML) and Others 2023 SCC OnLine 233;
Jaipur Vidyut Vitaran Nigam Limited and Others v.
ADANI Power Rajasthan Limited and Another 2020
SCC OnLine SC 697; Uttar Haryana Bijli Vitran Nigam
B
Limited (UHBVNL) and another v. Adani Power Limited
andOthers (2019) 5 SCC 325 : [2019] 4 SCR 487–
relied on.
MSEDCL v. GMR Warora Energy Ltd. and Others Civil
Appeal No. 6927 of 2021; ADANI Power Limited v.
Central Electricity Regulatory Commission 2018 SCC C
OnLine APTEL 5 – referred to.
Case Law Reference
[2019] 4 SCR 487 relied on Para 32
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.677- D
678 of 2021.
From the Judgment and Order dated 28.09.2020 of the Appellate
Tribunal for Electricity in Appeal Nos.116 and 155 of 2019.
Gopal Jain, G. Umapathy, M. G. Ramachandran, Niranjan Reddy,
E
Dr. A.M. Singhvi, Darius J. Khambata, Vikram Nankani, Sajan Poovayya,
Siddhartha Dave, Sr. Advs., Anup Jain, Udit Gupta, Ms. Prachi Gupta,
Vyom Chaturvedi for M/s. Udit Kishan and Associates, Ms. Poorva
Saigal, Shubham Arya, Nikunj Dayal, Ms. Pallavi Saigal, Ravi Nair,
Ms. Shikha Sood, Ms. Reeha Singh, Ms. Anumeha Smiti, Aneesh Bajaj,
Vishrov Mukherjee, Ms. Akhila Palem, Ms. Juhi Senguttuvan, F
Pukhrambam Ramesh Kumar, Mahesh Agarwal, Amit Kapur, Ms.
Poonam Sengupta, Avishkar Singhvi, Arshit Anand, Saunak Rajguru,
Aman Sharma, Ms. Aparajita, Ms. Deepshikha Mishra, Ankitesh Ojha,
Karan Rukhana, E. C. Agrawala, Ms. Pallavi Sharma, Ms. Vidhi Thacker,
Advs. for the appearing parties.
G
The Judgment of the Court was delivered by
B. R. GAVAI, J.
1. The present appeals challenge the judgment and order dated
th
28 September 2020 passed by the Appellate Tribunal for Electricity
H
670 SUPREME COURT REPORTS [2023] 5 S.C.R.

A (hereinafter referred to as ‘APTEL’), in cross appeals being Appeal
No. 116 of 2019, filed by Maharashtra State Electricity Distribution
Company Limited (hereinafter referred to as ‘MSEDCL’), the appellant
herein, and Appeal No. 155 of 2019, filed by ADANI Power Maharashtra
Limited (hereinafter referred to as ‘APML’), respondent No. 1 herein,
thereby challenging the order dated 7th February 2019, passed by
B
Maharashtra Electricity Regulatory Commission (hereinafter referred
to as ‘MERC’).
2. The facts, in brief, giving rise to the present appeals are as
under:
C APML and MSEDCL had entered into four long term Power
Project Agreements (hereinafter referred to as ‘PPA’) dated (a) 8th
September, 2008 for 1320 MW (hereinafter referred to as ‘1320 MW
PPA’); (b) 31st March, 2010 for 1200 MW (hereinafter referred to as
‘1200 MW PPA’); (c) 9th August, 2010 for 120 MW (hereinafter referred
to as ‘120 MW PPA’) and (d)16th February, 2013 for 440 MW (hereinafter
D referred to as ‘440 MW PPA’), pursuant to the competitive bidding
process conducted by MSEDCL.
3. APML, being aggrieved by the Change in Law on account of
the Ministry of Coal bringing into force the New Coal Distribution Policy,
2013 (hereinafter referred to as ‘NCDP, 2013’), which revised the
E arrangements prescribed under New Coal Distribution Policy, 2007
(hereinafter referred to as ‘NCDP, 2007’) for supply of coal, had filed a
petition being Case No. 189 of 2013, seeking compensation in Tariff on
account of Change in Law under the PPAs before MERC. Finally, in
the light of the judgment of this Court in the case of Energy Watchdog
F v. Central Electricity Regulatory Commission and Others1, the said
petition, after being remanded by the APTEL, was heard afresh by the
MERC.
4. Vide order dated 7th March, 2018, the MERC allowed the claims
of APML on account of Change in Law due to changes brought about
G by NCDP, 2013. APML, thereafter, preferred a review petition, being
Review Petition No. 167 of 2018 seeking extension of Change in Law
relief for domestic coal shortfall beyond March, 2017 on account of
changes introduced by the Scheme for Harnessing and Allocating Koyala
(Coal) Transparently in India (hereinafter referred to as ‘SHAKTI
1
H (2017) 14 SCC 80
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 671
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

Policy’) which had been released by the Ministry of Power on 22nd A
May, 2017. As per Clause 6.1 of the SHAKTI Policy, the Appropriate
Commission was required to consider the cost of imported/market based
e-auction coal procured for making up the shortfall in the domestic coal
for pass-through.
5. The MERC dismissed the said review petition. However, liberty B
was granted to APML to file a fresh petition to seek extension of Change
in Law relief for domestic coal shortfall beyond March, 2017 in view of
the introduction of the SHAKTI Policy. Subsequently, APML filed a
fresh petition, being Case No. 290 of 2018, before the MERC seeking
relief in support of Change of Law under the respective PPAs for non-
availability/short supply of domestic coal under SHAKTI Policy after C
March, 2017.
6. The MERC, vide its order dated 7th February 2019, allowed the
petition and granted relief for Change in Law due to the promulgation of
SHAKTI Policy. However, the relief was directed to be computed on
the same methodology and parameters as approved by the MERC vide D
its order dated 7th March, 2018. Cross appeals were filed before the
APTEL by APML and MSEDCL against the aforesaid order.
7. The learned APTEL framed the following five issues for
adjudication :
E
“Issue No.1:- Whether introduction SHAKTI Policy does
not amount to Change in Law under the PPAs
entered into between APML and MSEDCL
and whether APML has not provided notice
of such Change in Law to the Respondent
MSEDCL. F
Issue No.2:- Whether the MERC is correct in holding that
for the purpose of Change in Law
compensation, shortfall in domestic coal shall
be limited to a maximum of 25% of ACQ after
the introduction of SHAKTI Policy. G
Issue No.3:- (a) whether the MERC was correct in holding
that the SHR submitted by the Appellant in its
bid or SHR and Auxiliary Consumption norms
specified for new generating stations under the
MYT Regulations, 2011, whichever is superior H
672 SUPREME COURT REPORTS [2023] 5 S.C.R.

A shall form the basis for computing Change in
Law compensation under the PPAs?
(b) Whether the MERC was correct in holding
that the reference GCV of domestic coal
supplied by CIL shall be the middle value of
B GCV range of assured coal grade in LoA/
PSA/MoU and not the GCV as received?
Issue No.4:- Whether the MERC was justified in directing
APML to provide advance intimation of impact
on energy charge by using alternate coal for
the purpose of Merit Order Despatch?
C
Issue No.5:- Whether the Respondent MSEDCL is justified
in contesting APML’s entitlement to Carrying
Cost.”
8. The APTEL, vide judgment and order dated 28th September
D 2020, answered the issues as under:
“15.1 Issue No.1:-We hold that the introduction of SHAKTI
POLICY amounts to change in law and all the
ingredients of change in law are:, duly met under the
respective PPAs. The impugned order is therefore
affirmed on this issue.
E
15.2 Issue No.2:- We hold that findings in the impugned
order relating to the issue of restricting the quantum of
shortfall in domestic coal to a maximum of 25% are
against the basic principles of restitution I under the
change in law provisions of the PPAs.
F
15.3 Issue No.3:- In line with our judgment dated 14.09.2020
in Appeal No.182 of 2019, we hold that the change in
law compensation shall be calculated based on the SHR
specified in the MERC MYT Regulations, 2011 or the
actual SHR whichever is lower and actual GCV of coal
G as received as the plant site.
15.4 Issue No.4:- We find that the directions issued by the
State Commission regarding advance intimation
requirement is not consistent with normal Rules of MOD
preparation and also does not provide a level playing
H field for IPPs.
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 673
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

15.5 Issue No.5:- We find that allowance of carrying cost A
is a settled position of law and the State Commission
has already allowed the same to the Appellant, APML.”
9. Consequently, the APTEL dismissed the appeal preferred by
MSEDCL and allowed the appeal preferred by APML. Hence, MSEDCL
has preferred the present appeals. B
10. We have heard Shri Gopal Jain, learned Senior Counsel
appearing on behalf of the appellant-MSEDCL and Dr. Abhishek Manu
Singhvi, learned Senior Counsel appearing on behalf of respondent No.
1–APML.
C
11. Shri Jain submitted that the SHAKTI Policy (Part-B) restores
the position as covered by NCDP 2007. He, therefore, submits that,
since under the SHAKTI Policy there is 100% assured coal supply, then
there is no question of APML being compensated on account of shortfall
in coal supply. He submits that SHAKTI Policy is in continuation of
NCDP 2007. However, this has not been taken into consideration by the D
learned APTEL.
12. Shri Jain further submits that both APTEL and MERC have
failed to take into consideration that APML had not complied with the
condition of serving a mandatory notice to MSEDCL for Change in Law
under Article 13.3.2 of the 1320 MW PPA. E

13. Dr. Singhvi, on the contrary, submits that undisputedly, SHAKTI
Policy would amount to Change in Law. He submits that there is a
concurrent finding of fact by both APTEL and MERC that SHAKTI
Policy is a Change in Law event.
F
14. Dr. Singhvi further submits that there is also a concurrent
finding by APTEL and MERC on the issue of mandatory notice. He
submits that unless these findings are found to be perverse or are based
on extraneous consideration, it will not be permissible for this Court to
interfere with the same.
G
15. When the batch of appeals was being heard, it was agreed
between all the parties that this Court should first decide Civil Appeal
No. 684 of 2021 (Maharashtra State Electricity Distribution Company
Limited (MSEDCL) v. ADANI Power Maharashtra Limited (APML)
H
674 SUPREME COURT REPORTS [2023] 5 S.C.R.

A and Others2) and Civil Appeal No. 6927 of 2021 (MSEDCL v. GMR
Warora Energy Ltd. and Others) inasmuch as three of the issues
involved in all the appeals were common. It was submitted that those
two appeals could be decided by deciding the three common issues.
However, insofar as the other appeals are concerned, in addition to the
three common issues, certain additional issues were also involved.
B
16. The said three common issues are thus:
(i) Whether Change in Law relief on account of NCDP 2013
should be on ‘actuals’ viz. as against 100% of normative
coal requirement assured in terms of NCDP 2007 OR
C restricted to trigger levels in NCDP 2013 viz. 65%, 65%,
67% and 75% of Assured Coal Quantity (ACQ)?
(ii) Whether for computing Change in Law relief, the operating
parameters be considered on ‘actuals’ OR as per technical
information submitted in bid?
D (iii) Whether Change in Law relief compensation to be granted
from 1st April 2013 (start of Financial Year) or 31st July
2013 (date of NCDP 2013)?
17. Vide the judgment and order dated 3rd March 2023 in the case
of MSEDCL v. APML and Others (supra), this Court decided those
E two appeals after considering the aforesaid three issues.
18. The first issue was answered by this Court, holding that the
Change in Law relief for domestic coal shortfall should be on ‘actuals’
i.e. as against 100% of normative coal requirement assured in terms of
NCDP, 2007. Insofar as the second issue is concerned, it was held that
F the Station Heat Rate (SHR) and Auxiliary consumption should be
considered as per the Regulations or actual, whichever is lower. The
third issue was answered by holding that the Start date for the Change
in Law event for the NCDP, 2013 is 1st April 2013.
19. Insofar as Issue Nos. 2 and 3 as framed by the APTEL are
G concerned, the same stand squarely covered by the judgment of this
Court in the case of MSEDCL v. APML and Others (supra). The
remaining three issues, which are required to be considered in the present
appeals, are thus:
2
2023 SCC OnLine 233
H
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 675
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

“Issue No.1:- Whether introduction SHAKTI Policy does A
not amount to Change in Law under the PPAs
entered into between APML and MSEDCL
and whether APML has not provided notice
of such Change in Law to the Respondent
MSEDCL.
B
Issue No. 2:- . ....
Issue No. 3:- …………
Issue No. 4:- Whether the MERC was justified in directing
APML to provide advance intimation of impact
on energy charge by using alternate coal for C
the purpose of Merit Order Despatch?
Issue No. 5:- Whether the Respondent MSEDCL is justified
in contesting APML’s entitlement to Carrying
cost.”
D
20. We will first consider the question as to whether the SHAKTI
Policy would amount to Change in Law.
21. It will be apposite to refer to some relevant parts of the judgment
of this Court in the case of Energy Watchdog (supra), which read thus:
“50. ……Even otherwise, from a reading of Clause 13, it is clear E
that Clause 13.1.1 is in four different parts. The first part speaks
of enacted laws; the second speaks of interpretation of such laws
by courts or other instrumentalities; the third speaks of changes in
consents, approvals or licences which result in change in cost of
the business of selling electricity; and the fourth refers to any
F
change in the declared law of the land for the project, cost of
implementation of resettlement and rehabilitation or cost of
implementing the environmental management plan. “Competent
court” in Clause 13.1.2 is defined as meaning only the judicial
system of India.
…… G

56. However, insofar as the applicability of Clause 13 to a change
in Indian law is concerned, the respondents are on firm ground. It
will be seen that under Clause 13.1.1 if there is a change in any
consent, approval or licence available or obtained for the project,
H
676 SUPREME COURT REPORTS [2023] 5 S.C.R.

A otherwise than for the default of the seller, which results in any
change in any cost of the business of selling electricity, then the
said seller will be governed under Clause 13.1.1. It is clear from a
reading of the Resolution dated 21-6-2013, which resulted in the
letter of 31-7-2013, issued by the Ministry of Power, that the earlier
coal distribution policy contained in the letter dated 18-3-2007
B
stands modified as the Government has now approved a revised
arrangement for supply of coal. It has been decided that, seeing
the overall domestic availability and the likely requirement of power
projects, the power projects will only be entitled to a certain
percentage of what was earlier allowable……”
C 22. It can thus be seen that this Court has held that if there is a
Change in any consent, approval or licence available or obtained for the
project, otherwise than for the default of the seller, which results in any
change in any cost of the business of selling electricity, then the said
seller will be governed under Clause 13.1.1 of the PPA. As already
D discussed hereinabove, this Court has consistently held that modification
to NCDP 2007 by the communication dated 31st July 2013 would amount
to Change in Law and the generating companies would be entitled to
compensation on account of such Change in Law. Undisputedly, SHAKTI
Policy also reduces the ACQ as was assured under the 2007 NCDP.
Consequently, SHAKTI Policy will also have to be held to be Change in
E Law.
23. A three-Judges Bench of this Court in the case of Jaipur
Vidyut Vitaran Nigam Limited and Others v. ADANI Power
Rajasthan Limited and Another3, has also considered the effect of
SHAKTI Policy and held that the seller would be entitled to the benefit
F occurring on account of SHAKTI Policy. As such, the contention that
SHAKTI Policy does not amount to Change in Law is without substance.
24. Following the judgments in the case of Energy Watchdog
(supra) and ADANI Power Rajasthan Limited (supra), this Court, in
the case of MSEDCL v. APML and Others (supra),observed thus:
G
“130. The MoP, thereafter, addressed a communication dated
31st July 2013 to the Secretary, CERC specifically pointing out
the decision of the CCEA to the effect that the higher cost of
imported coal was to be considered for pass-through as per the
3
2020 SCC OnLine SC 697
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MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 677
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

modalities suggested by CERC. The communication states that, A
as per the decision of the Government, the higher cost of import/
market based e-auction coal will have to be considered for being
made a pass-through on a case to case basis by CERC/SERC to
the extent of shortfall in the quantity indicated in the LoA/FSA.
131. The Tariff Policy dated 28th January 2016 issued by the MoP B
in paragraph 6.1 also specifically notes this position and states
that, in case of reduced quantity of domestic coal supplied by CIL
vis-à-vis the assured quantity or quantity indicated in LoA/FSA,
the cost of imported/market based e-auction coal procured for
making up the shortfall shall be considered for being made a pass-
through by the Appropriate Commission. C

132. Undisputedly, in the case of Energy Watchdog (supra) as
well as in Adani Rajasthan case (supra) this Court has held that
on account of the Change in Law, the generating companies were
entitled to compensation so as to restore the party to the same
economic position as if such Change in Law had not occurred. D
Had the Change in Law not occurred, the generating companies
would have been entitled to the supply as assured by the CIL/
Coal Companies under the FSA.
133. It is contended by the DISCOMS that in the case of Energy
Watchdog (supra), this Court has specifically held that the doctrine E
of force majeure was not applicable if there was an unexpected
rise in the price of coal and, as such, it will not absolve the
generating companies from performing their part of the contract.
It is submitted that when the bidders submitted their bids, this was
a risk they knowingly took. We find the said submission to be F
without substance. The generators are not claiming compensation
on the basis of rise in price of coal or on the ground of force
majeure. Their claims, in fact, are on the basis of the Change in
Law, which this Court, in the case of Energy Watchdog (supra)
as well as in Adani Rajasthan case (supra), has upheld on the
ground of Change in Law. G
134. The contention of the DISCOMS that the Adani Rajasthan
case (supra) is not applicable to the facts of the present case
inasmuch as in Adani Rajasthan case (supra), the State of
Rajasthan had assured 100% coal supply and that it was not a
H
678 SUPREME COURT REPORTS [2023] 5 S.C.R.

A case of FSA, is, in our considered view, without substance. In the
present case also, the NCDP 2007 had assured 100% fuel/coal
supply of the normative value.
135. The restitutionary principle has been stated by this Court in
the case of Uttar Haryana Bijli Vitran Nigam Limited
B (UHBVNL) (supra) thus:
“10. Article 13.2 is an in-built restitutionary principle which
compensates the party affected by such change in law and
which must restore, through monthly tariff payments, the
affected party to the same economic position as if such change
C in law has not occurred. This would mean that by this clause a
fiction is created, and the party has to be put in the same
economic position as if such change in law has not occurred
i.e. the party must be given the benefit of restitution as
understood in civil law. ………….””

D 25. As such the restitution principle, as has been consistently applied
by this Court on account of Change in Law, will also be applicable on
account of change occurring due to the introduction of SHAKTI Policy.
26. The contention of the appellant that the SHAKTI Policy brings
back the position of NCDP 2007 and assures 100% coal supply, is not
E factually correct. A perusal of the SHAKTI Policy would reveal that
SHAKTI Policy assures 70% of ACQ as against 100% in 2007 NCDP.
27. In that view of the matter, we find that the contention that
SHAKTI Policy restores the position of 2007 NCDP is factually incorrect.
28. Insofar as Change in Law Notice is concerned, the APTEL,
F in its judgment and order, observed thus:
“13.7 We have considered the submissions made by APML vis-
a-vis the findings in the impugned order. It is relevant to note that
no submission to the contrary has been advanced by the
Respondent, MSEDCL on this issue. In the Impugned Order,
G MERC appears to have expanded the intent of Change in Law
notice as a means of intimation to the buyer of power that on
account of intended use of alternate coal, the cost of power is
likely to increase and then the distribution licensee may decide to
not schedule such costly power. Firstly, no such intent can be
deciphered from the provisions of the PPA which require a change
H
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 679
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

in law notice to be given to the procurers. MERC has not A
deliberated upon how this regime will impact the implementation
of change in law provision in other scenarios. For example, if
there is a change in rates of taxes or duties, which entitles the
generator to seek change in law relief, can it still be said that the
procurer should be intimated about the impact of such changes in
B
taxes or duties to enable them to decide whether to schedule power
or not. In our view, this does not appear to be the intent of change
in law notice to the procurers under the PPAs. This is for the
simple reason that whether there will be impact on MSEDCL
would be known only after MERC decides the change in law
claim. Until such time notice given by sellers merely to intimate C
the occurrence of change in law event, in our view, will not
influence decisions related to scheduling of power on merit order
principles. In any event in far as preparation of MOD stack is
concerned, the normal practice is to prepare MOD on the basis
of the energy charge bill of (n-1)th or (n-2)th month is taken into
D
account in the order of precedence. Therefore, the impact of a
regular or consistent usage of alternate coal will in anyway be
reflected in the MOD stack, albeit with the lag of one or two
months.”
29. The aforesaid finding of APTEL cannot be said to be perverse
or based on extraneous consideration or in contravention of any of the E
statutory provisions.
30. That leaves us with the issue with regard to Carrying Cost.
31. In the case of ADANI Power Limited v. Central Electricity
Regulatory Commission4, the CERC had come to a conclusion that F
there was no provision in the PPA for payment of Carrying Cost for the
period from the date of the Change in Law event till the date of approval
by the Commission. As such, the Commission had rejected the prayer of
the generating company to grant carrying Cost on restitutionary principles
from the date of Change in Law till the date of decision. The APTEL,
while reversing the judgment of the CERC and allowing the Carrying G
Cost, had observed thus:
“29. To our mind such adjustment in the tariff is nothing less then
re-determination of the existing tariff.
4
2018 SCC OnLine APTEL 5 H
680 SUPREME COURT REPORTS [2023] 5 S.C.R.

A x. Further, the provisions of Article 13.2 i.e. restoring the
Appellant to the same economic position as if Change in Law
has not occurred is in consonance with the principle of
‘restitution’ i.e. restoration of some specific thing to its rightful
status. Hence, in view of the provisions of the PPA, the
principle of restitution and judgement of the Hon’ble Supreme
B
Court in case of Indian Council for Enviro-Legal
Action v. Union of India, we are of the considered opinion
that the Appellant is eligible for Carrying Cost arising out of
approval of the Change in Law events from the effective date
of Change in Law till the approval of the said event by
C appropriate authority. It is also observed that the Gujarat Bid-
01 PPA have no provision for restoration to the same economic
position as if Change in Law has not occurred. Accordingly,
this decision of allowing Carrying Cost will not be applicable to
the Gujarat Bid-01 PPA.”
D 32. The same came to be challenged before this Court in the case
of Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) and
another v. Adani Power Limited and Others5. The court rejected the
same and upheld the order of APTEL. As such, the contention in this
regard needs to be rejected.
E 33. This Court, in the case of MSEDCL v. APML and
Others(supra), after considering the relevant provisions under the
Electricity Act, 2003 with regard to appointment, qualifications and
Members of the CEA, CERC and the learned APTEL, held that these
bodies are bodies consisting of experts in the field. After considering
various judgments on the issue, this Court observed thus:
F
“123. Recently, the Constitution Bench of this Court in the case
of Vivek Narayan Sharma v. Union of India has held that the
Courts should be slow in interfering with the decisions taken by
the experts in the field and unless it is found that the expert bodies
have failed to take into consideration the mandatory statutory
G provisions or the decisions taken are based on extraneous
considerations or they are ex facie arbitrary and illegal, it will not
be appropriate for this Court to substitute its views with that of
the expert bodies.”
5
(2019) 5 SCC 325
H
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. v. 681
ADANI POWER MAHARASHTRA LTD. [B. R. GAVAI, J. ]

34. In our view, the view taken by the APTEL cannot be said to A
be a view taken in ignorance of the mandatory statutory provisions nor
can it be said that it is based on extraneous considerations. The view
also cannot be said to be ex-facie arbitrary or illegal. As such, in our
view, no interference would be warranted in the present appeals.
35. In the result, the appeals are dismissed. Pending application(s), B
if any, shall stand disposed of. No costs.

Divya Pandey Appeals dismissed.
(Assisted by : Shevali Monga, LCRA)

C

D

E

F

G

H