Summary
The Supreme Court dismissed the Rajasthan Discoms' appeal under Section 125 of the Electricity Act, 2003 against APTEL's grant of change-in-law compensation and compounded carrying cost at LPS rates to Adani Power Rajasthan for Coal India's Evacuation Facility Charges notification of 19.12.2017. An appeal under Section 125 lies only on a substantial question of law as in Section 100 CPC; the only such question, the interplay of Articles 10.2.1 and 10.5 of the PPA, was answered by holding that adjustment runs from the date of the notification under Article 10.5.1(i), that Article 10.5.1(ii) applies only where a court, tribunal or governmental instrumentality changes the interpretation of law, and that a supplementary bill under Article 10.5.2 read with Article 8.8 is to be raised only after adjudication of the change-in-law claim.
Issues
- What is the scope of an appeal to the Supreme Court under Section 125 of the Electricity Act, 2003, read with Section 100 of the Code of Civil Procedure, 1908.
- Whether, on a change in law arising from a notification of an Indian governmental instrumentality, the tariff adjustment is effective from the date of the notification under Article 10.5.1(i) of the PPA or from the date of an adjudicatory order under Article 10.5.1(ii).
- Whether a party's differing understanding of whether an event is a change in law amounts to a 'change in interpretation of law' attracting Article 10.5.1(ii).
- Whether the generator was obliged to raise a supplementary bill under Article 8.8 before adjudication, so that carrying cost at Late Payment Surcharge rates could not be awarded from the date of the change in law.
Provisions considered
- Section 111, Electricity Act, 2003APTEL, hearing appeals from the Regulatory Commission, is vested with all the powers the Commission could exercise and is the final court of fact and law. (¶¶ 13, 14)
- Section 125, Electricity Act, 2003An appeal to the Supreme Court lies only on the grounds in Section 100 CPC. The appellant must raise a substantial question of law, which the Court frames and puts to the other side; the Court decides it on APTEL's findings of fact unless they are perverse (contrary to the record, unreasoned or based on a misconception apparent on the face of the record). The Court may add further substantial questions after notice. Here only one such question was framed by the order of 09.09.2024; the other issues argued did not constitute substantial questions of law. (¶¶ 13, 15, 16, 17)
- Section 100, Code of Civil Procedure, 1908Being in pari materia with Section 125 of the 2003 Act, and after the 1978 amendment, it requires a question of law that is substantial; a mere question of law is insufficient, and the question must be such that an affirmative answer would reverse APTEL's decision. (¶¶ 15, 16)
Held
- A court hearing a statutory appeal is confined to the contours of the power the statute confers, whatever its status. Under Section 125 of the Electricity Act, read with Section 100 CPC, the Supreme Court entertains an appeal only on a substantial question of law framed by it, decided on APTEL's findings of fact save where perversity is shown; APTEL is the final court of fact and law under Section 111. (¶¶ 13, 14, 15, 16, 17)
- Whether a notification issued by a public authority such as Coal India constitutes a change in law, and the date from which compensation is reckoned, stand concluded by GMR Warora, UHBVNL (2019) and UHBVNL (2023): additional charges imposed by instrumentalities of the State after the cut-off date are change-in-law events, compensation accrues on restitutionary principles from the date of the notification, and compound carrying cost from that date is justified. Fresh consideration of carrying cost at LPS rates would be purely academic. (¶¶ 7, 18, 27)
- Article 10.2.1 of the PPA embodies the restitutionary principle of restoring the affected party to the economic position it would have occupied but for the change in law; it is a substantive provision to be given effect in letter and spirit. Under Article 10.5.1(i) the adjustment in monthly tariff payment becomes effective as a matter of course from the date notified in the change in law. (¶¶ 20, 21, 22)
- Article 10.5.1(ii) applies only where the change in law arises from a change in the interpretation of law by an order or judgment of a competent court, tribunal or Indian governmental instrumentality. A mere difference between the parties in their understanding of whether an event is a change in law is not a different interpretation of law and does not bar entitlement under clause (i). Recognising a change in law is different from interpreting a notification; since the notification of 19.12.2017 and its application were undisputed and no interpretive adjudication was involved, clause (ii) had no application. (¶¶ 23, 24, 25)
- Article 10.5.2 operates thereafter: payment for change in law is through a supplementary bill under Article 8.8, which the other party is bound to pay, and this can happen only after due adjudication of the change-in-law claim by the competent forum. Article 8.6 (disputed bills) may arise only afterwards, on the quantum claimed in such a supplementary bill. (¶ 26)
- The contention that a supplementary bill ought to have been raised earlier, so that payment and carrying cost could run only thereafter, had neither a factual nor a legal basis; the generator had notified the change-in-law event the day after the notification, and the RERC's subsequent order of 19.06.2024 on remand was unchallenged. The APTEL's condonation of delay in filing and re-filing had attained finality, and APTEL had already denied carrying cost for the period of delay. (¶¶ 6, 7, 8, 28)
Result
Appeal dismissed; APTEL's judgment dated 18 April 2024 upheld. Pending applications disposed of.