Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Electricity – Power Purchase Agreements (PPAs) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Electricity – Power Purchase Agreements (PPAs) – Arts. 11, 13 – ‘Change in Law’ event – Restitutionary principles – Appellants (distribution licensees) if liable to pay simple interest or compound interest on the carrying cost to respondent no.1 (power generating company) – Held: Relief relating to carrying cost was granted to respondent no.1 by the Appellate Tribunal vide order dtd. 13.04.18 which was duly upheld by Supreme Court in a previous litigation between the same parties – Once carrying cost has been granted in favour of the respondent no.1, appellants cannot urge that interest on carrying cost should be calculated on simple interest basis instead of compound interest basis – Idea behind granting interest on carrying cost is aimed at restituting a party that is adversely affected by a Change in Law event and restore it to its original economic position as if such a Change in Law event had not taken place – In the instant case, the respondent no.1 had to incur expenses to purchase the Flue Gas Desulfurization (FGD) unit and install it in view of the terms and conditions of the Environment Clearance given by Ministry of Environment and Forests, Union of India, in 2010 – For this, it had to arrange finances by borrowing from banks – Respondent no.1 justified in stating that if the banks have charged it interest on monthly rest basis for giving loans to purchase the FGD, any restitution will be incomplete, if it is not fully compensated for the interest paid by it to the banks on compounding basis – Restitutionary principles encapsulated in Article 13.2 of the PPAs would take effect for computing the impact of Change in Law – Appellate Tribunal justified in allowing interest on carrying cost in favour of respondent no.1 for the period between 2014, when the FGD was installed, till 2021 – Central Commission not justified in excluding the period between 2014 and 2018 and grant relief from the date of the passing of the order i.e., from 28.03.18 to 2021 – Impugned order passed by Appellate Tribunal upheld – Electricity Act, 2003 – s.125. |
Judge | Hon'ble Ms. Justice Hima Kohli |
Neutral Citation | 2022 INSC 862 |
Petitioner | Uttar Haryana Bijli Vitran Nigam Ltd. And |
Respondent | Adani Power (mundra) Limited And Another |
SCR | [2022] 11 S.C.R. 102 |
Judgement Date | 2022-08-24 |
Case Number | 7129 |
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