Uttar Haryana Bijli Vitran Nigam Limited and Another vs Adani Power (Mundra) Limited and Another

1.2 The communication dated 19.06.2013 Modification in Model FSA applicable for New Power plants in respect of Interplant transfer of coal refers to the decision of the CIL taken in its meeting held on 27th May 2013. A perusal thereof would reveal that the transfer of coal which was not allowed hitherto, has been allowed only between the power plants owned by the purchaser or its wholly owned subsidiary. It further provides that no transfer of coal shall be allowed for a JV Company of the purchaser; that the supply of coal shall, for all commercial purpose under the FSA, remain unchanged and on account of the original Power Plant; that both the Power Plants should have executed FSA in the modified FSA Model applicable for new power plants and not having any supplies linked to coal blocks. It further provides that in case of IPPs, both the plants must have valid long term PPAs with DISCOMS. In no case the transferred quantity to a plant together with the quantity supplied under the applicable FSA shall exceed the ACQ of the Transferee Plant for a particular year which is proportional to the long term PPA with DISCOMS. Transfer of coal will not be allowed to those plants who are allotted coal blocks under this arrangement. In case of change in the ownership and no environmental clearance of the plant, this facility shall stand withdrawn. It could thus be seen that the said communication reflects the decision of CIL. The CIL is an instrumentality of the Government of India. As such, APTEL erred in holding the said communication dated 19th June 2013 not to amount to ‘Change in Law’. [Paras 26, 27][1105-BF]

1.3 APTEL held that the said communication is an administrative instruction addressed to all the subsidiaries. APTEL failed to take into consideration that CERC had not decided the said issue, inasmuch as the decision on the said issue would have affected the other two DISCOMS, i.e., MSEDCL and Rajasthan DISCOMS. It would be relevant to note that the very same tribunal, immediately after three months, in the case of Rattan India Power Limited v. Maharashtra Electricity Regulatory Commission and Another, took a totally contrary view. Vide judgment in Civil Appeal Nos. 5005 of 2022 and 4089 of 2022, the concurrent view of Maharashtra Electricity Regulatory POWER (MUNDRA) LTD.

Commission and APTEL holding the said EFC to be ‘Change in Law’ is upheld. In that view of the matter, the finding of APTEL that the communication dated 19th June 2013 permitting IPT is not a ‘Change in Law’ would not be sustainable. [Paras 2831][1105-F; 1106-D-E; 1107-B]

1.4 While submitting the bid, AP(M)L must have factored in the cost of transportation of linkage coal from MCL Coal Mine, Talcher to its plant at Mundra. As per the details given in the PPA, the mode of transportation is through railway. As such, prior to the IPT being permitted, AP(M)L was bound to utilize the linkage coal from MCL Coal Mine, Talcher, only for the purpose of its original power plant, i.e., AP(M)L. Only on account of the IPT would it be in a position to utilize the coal from MCL Coal Mine, Talcher either for its plant in Maharashtra or in Rajasthan. Similarly, it would be entitled to utilize the coal linkages for its plant in Maharashtra or in Rajasthan for production of energy in its other power plants. As such, there is bound to be a variance in the cost of transportation by railways. If the coal is to be transported from MCL Coal Mine, Talcher to AP(M)L, the cost of railway transportation would be higher as compared to the cost of railway transportation from MCL Coal Mine, Talcher to Tiroda TPS. The savings made in the cost of transportation, i.e., the cost which would have been incurred for transporting the coal from MCL Coal Mine, Talcher to ‘X’ plant minus the actual cost of transportation has to be passed on to the DISCOMS, which, in turn, has to be passed on to the end consumers. [Para 32][1107C-G]

1.5 The changes occurring on account of permitting IPT would affect AP(M)L as well as the appellants and two other DISCOMS, i.e., MSEDCL and Rajasthan DISCOMS. This was also observed by the CERC in its order dated 8th July 2019. No expertise is there for working out as to what benefit any of the parties would be entitled to on account of the said ‘Change in Law’. However, the cost of saving in the railway transportation on account of ‘Change in Law’ needs to be worked out and passed on to the appropriate DISCOMS, which can further be passed on to the consumers. CERC, which is a body of experts, is best suited to do so. [Para 33][1107-H; 1108-A-B]

1.6 Though the issue with regard to allowing ‘Change in Law’ compensation on the basis of ACQ – actual supply is upheld, the issue with regard to IPT not being ‘Change in Law’ is set aside. The finding of the APTEL to the effect that the communication dated 19th June 2013 providing for IPT does not amount to ‘Change in Law’ is set aside. It is held that IPT amounts to ‘Change in Law’. [Paras 34, 35][1108-C-D]

1.7 The matter is remitted to CERC for working out the effect of the said ‘Change in Law’ after giving notice to MSEDCL as well as Rajasthan DISCOMS and hearing all the parties including the appellants and the respondents herein. However, since the said issue has been pending since a long time, CERC is directed to decide the said issue and calculate the benefits that would be accruable to any of the parties within the stipulated period. [Paras 36, 37][1108-E-F]

Energy Watchdog v. Central Electricity Regulatory Commission and Others (2017) 14 SCC 80;

Maharashtra State Electricity Distribution Company Limited v. Adani Power Maharashtra Limited and Others 2023 SCC OnLine SC 233; Maharashtra State Electricity Distribution Company Limited v. GMR Warora Energy Ltd. and Others Civil Appeal No. 6927 of 2021; Rattan India Power Limited v. Maharashtra Electricity Regulatory Commission and Another Appeal Nos. 118 of 2021 and 40 of 2022 dated 22nd March 2022 – referred to.